STATION BULLETIN 406
MARCH 1942
farm OrgalliLafion and financial
ef urns
IN THE LOWER POWDER RIVER VALLEY
BAKER COUNTY, OREGON
Oregon State System of Higher Education
Oregon State College
Corvallis
Agricultural Experiment Station
In Cooperation with
Soil Conservation Service
and
Bureau of Agricultural Economics
United States Department of Agriculture
FOREWORD
Financial returns in farming are dependent
upon two sets of factors: (1) those within the
control of the individual farmer, and (2) those
outside of his control.
This publication, dealing with the first group
of factors, presents the results of a careful economic analysis of the agriculture of the Lower
Powder River Valley in Baker County. Special
consideration has been given to the following
types of farming: beef cattle, range sheep, dairy,
general livestock, and crops.
It is hoped that the results of this study
will be helpful, (1) to individual ranchers and
farmers, in this valley and in similar areas of
eastern Oregon, in pointing out those factors
that were chiefly responsible for variations in
farm income; and (2) to State and Federal
agencies in the administration of programs designed to improve farm income and at the same
time conserve soil and water resources.
WM. A. SCHOENFELD
Director
TABLE OF CONTENTS
Page
Summary
4
Introduction
7
Description of Area
8
The Keating Area
Farm Organization
12
Distribution of Farm Investment
24
Financial Summary
25
Representativeness of Data
27
Some Reasons for Variations in Income
28
Present Economic Status
41
Conclusions
46
The Sparta Area
Farm Organization
48
Distribution of Investment
49
Financial Summary
50
Representativeness of Data
51
Present Economic Status
51
Conclusions
52
Appendix
Explanation of Terms
53
Supplementary Tables
54
SUM MARY
This study deals with the organization and financial returns
of 61 irrigated farms and ranches in the Keating Area and 19
dry-land farms in the Sparta Area of Baker County, Oregon.
The information presented in this publication was obtained by
the survey method and represents the fiscal year, June 1, 1938
to May 31, 1939.
THE KEATING AREA
TYPE OF FARMING AND LAND USE.
The 61 farms in the Keating Area have been classed into 5
types of farming groups as follows: 16 beef cattle ranches, 6
sheep ranches, 14 dairy farms, 17 general livestock farms, and
8 crop farms.
SuMMARY 01' SIZE AND FINANCIAL RETU5NS PER FARM BY TYPE OF FARMING
Keating Area, Baker County, Oregon, 1939
Beef cattle
Sheep
Dairy
General livestock
Crop
crop
Acres
263
442
79
72
24
Animal
units
Total
farm
investment
livestock
$46,478
91,127
11,082
10,413
11,264
19
2,635
430
235
679
per year
vestment
income
$l,21S
accumulatiori
Ofl In-
I
219
517
39
30
Capital
Return
Labor
'er CcItt
4.5
5.4
1.8
0.1
4.7
$721.
i
Type of farming
Acres in
868
426
3a0
201
Range land, excluding publicly owned land, comprises 88
per cent of the total acres operated. The farms and ranches
average 1,854 acres per farm, of which 163 acres are in crop and
1,634 are privately owned range land. About 74 per cent of the
average crop acres are devoted to hay, 20 per cent to grain and
6 per cent to miscellaneous crops. During the crop year 1938,
the yields were approximately 15 per cent lower than those reported as "usual."
LIVESTOCK AND LIVESTOCK PRACTICES.
Beef cattle and range sheep account for 75 per cent of the
animal units, dairy cattle account for 10 per cent, workstock S
per cent, and the remainder is hogs, poultry, and farm sheep.
Dairy stock is the most important class of livestock on most
of the farms.
Beef cattle and range sheep are grazed on private range
land, the public domain, and the national forest. During the
winter months they are fed about a ton and a half of hay per
animal unit on the home ranch. The feeding period usually
lasts from December through March. During the year of the
study, beef cattle operators received a calf crop of 72 per cent
and sheep operators had lamb crops averaging 113 per cent. The
4
dairy cattle had a butterfat production of 204 pounds per cow,
which is about 32 pounds lower than the state average for ap=
proximately the same period.
INVESTMENT.
The average farm investment for all 61 farms is $28,077. In
terms of total investment, sheep ranches are almost twice larger
than cattle ranches and in turn cattle ranches are four times
I
larger than the other three types of farms. Land represents the
largest single investment. It varies from 54 per cent of the total
investment on cattle ranches to 70 per cent on crop farms.
Livestock represents 30 per cent of the investment on sheep
ranches and only 8 per cent on crop farms.
FINANCIAL RETURNS.
Range livestock ranches were more successful than the
other types of farming. Of course they were also much larger.
The operators earned 4 per cent on their investment in addition
to an income for their labor and management of $832. The latter
figure is about $25 more than the operators considered their own
time to be worth. The operators also had a house to live in and
the use of farm produced food. These items valued at wholesale prices amounted to $450 per farm.
The average gain in net worth per year was $561 for the 13
years that the operators had been on their present farms. Sheep
ranches had the highest capital accumulation per year, but in
relation to their original net worth they had accumulated relatively less than the other types of farming.
REASONS FOR VARIATION IN INCOME.
The average income received by all operators can be considered satisfactory. The incomes on individual farms and
groups of farms, however, vary considerably. In general the
factors that were most important in explaining differences in
labor income between individual farms, without regard to type
of farming, were the two factors, productive man work units
per farm (size of farm) and productive man work units per
man (labor efficiency). With respect to individual types of
farming, the following factors were chiefly responsible for variations in labor income: size of farm on beef cattle ranches,
dairy farms, and crop farms; labor efficiency on beef cattle
ranches, and general livestock farms; feeding rates on beef cattle
ranches and dairy farms; and crop yields on general livestock
farms.
LONG-TERM AND SHORT-TERM INDEBTEDNESS.
The total farm investment consists of the operator's equity,
$16,984; farm liabilities of the operator, $7,372, and the value of
rented property, $3,721.
5
=
-
Real estate mortgage indebtedness on mortgaged farms
averaged $7,391 per farm, or expressed in another way, amounted
to 36.8 per cent of the value of real estate. Short-term credit
averaged $2,217 per loan.
THE SPARTA AREA
This Area is located in the eastern portion of the Lower
Powder River Watershed and at an elevation several hundred
-
feet above the valley floor and the Keating Area.
LAND USE.
The 19 farms average 477 acres per farm of which about 72
are in crop, and 381 are grazing land. About 50 per cent of the
acreage in crops is devoted to hay, 37 per cent to grain, and 13
per cent to miscellaneous crops. During the year of the study,
crop yields were about 91 per cent of usua1."
LIvEST0cI.
Livestock per farm average 20 animal units. Of this number, 34 per cent were dairy cattle, 33 per cent were workstock,
13 per cent were beef cattle and the remainder were miscellaneous livestock. Only one farm had beef cattle and none had
I
range sheep.
INVESTMENT.
The average farm investment was $5,741. Of this amount,
57 per cent represents the value of land and 18 per cent is the
value of livestock.
FINANCIAL RETURNS.
Total farm receipts amounted to $1,077 per farm and were
derived chiefly from the sale of livestock, livestock products,
and crops.
The net financial returns were low. After being allowed
4 per cent on their total farm investment, the operators failed
to receive a wage for their labor and management. They had
a house to live in, however, and the use of farm produced food.
These items valued at wholesale prices amounted to $302 per
farm.
CONCLUSIONS.
With possibly one or two exceptions, all farms in the
-
Sparta Area are quite small. Seventy-two acres of dry-farmed
land with the kinds of crops grown and the yields received, even
when combined with about 13 animal units of productive livestock cannot be expected to return a very large income. The
farms are so small that on the average each man has only
enough work to keep him busy about 122 days per year.
6
I
Farm Organization and Financial
Returns in the Lower Powder
River Valley, Baker
County, Oregon*
By
GEORGe B. DAVIS, Research Assistant,
and
D. CURTIS MUMFORD, Head, Department
of Farm Management
INTRODUCTION
economic study of farm and ranch organization in the Lower Powder
THIS
River Valley of Baker County, Oregon, was made at the request of the
Baker County Land Use Planning Committee. It represents one phase of the
coordinated land use survey being made of this particular area.t
OBJECTIVES
The objectives of this study of the economic aspects of ranch and farm
organization in the Lower Powder River Valley were:
1.To describe the present land use in its relation to farm and
ranch organization.
To determine financial returns by individual farms and by
type of farming groups.
To analyze the factors responsible for variations in income.
To assemble economic information to facilitate planning a
land use and soil conservation program.
Acknowledgments:
The authors thank the eighty farmers and ranchers for their
time and effort in making the basic data available. Acknowledgments are also made to
H. L. Thomas and Wesley R. Spencer of the Soil Conservation Service for consultation
and advice in planning this study; Bernard M. Otness and Virgil D. Kennedy of the Soil
Conservation Service for their assistance in obtaining the detailed farm organization records;
Joe L. Barber of th Grazing Service, United States Department of Interior, for aid in
analyzing the records; Norma MacDonald and Audrey Schneider for assistance in tabulating
and summarizing the data; Professor E. L. Potter, head of the Division of Agricultural
Economics, Oregon State College, for his valuable aid in the preparation of the text; and
P. T. Fortner, County Agricultural Agent of Baker County, for his advice and help in
making contacts with the cooperators. The authors are indebted to the Soil Conservation
Service for the cover page picture and to the Agricultural Adjustment Administration for the
pictures used in Figures 6, 8, and 10.
t The other phases of the "overall" study consist of the following surveys: conservation, range, woodland, engineering, agronomic, and wildlife.
At the present time the field work is under way or has beer, completed for most of
these surveys. It is anticipated that the final results of the individual studies will be
combined into an overall" report, which will serve as a basis for making adjustments in
land use.
The following organizations are cooperating in making these surveys: The Agricultural
Adjustment Administration, the Bureau of Agricultural Economics, the Bureau of Chemistry
and Soils, the Bureau of Entoinolo-y and Plant Quarantine, the Forest Service the Farm
Security Administration and the Soil Conservation Service of the United States bepartment
of Agriculture; the Fish and Wildlife Service and the Grazing Service of the Department of
the Interior, and Oregon State College.
7
8
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
SOURCE OF DATA
The field data were obtained from 80 farm operators in Lower Powder
River Valley by means of the survey method. The data were collected in the
summer of 1939 and represent the period June 1, 1938 to May 31, 1939. Of
the total records completed, 61 were secured from operators in the Keating
Area and 19 from operators in the Sparta Area. The 80 records represent
about 80 per cent of the approximately 100 farm operators in the Lower Powder
River Valley. The remaining 20 operators were contacted, but complete records
were not obtained.
METHOD AND PROCEDURE
In analyzing the information obtained in the field, it has been assumed for
comparative purposes that all operators are free of debt, that all rented land is
owned, and all taxes are paid. As a result, interest and principal payments: on
mortgages and rent payments have not been considered as expenses. Taxes on
rented land, however, are considered as expenses of the farm operator. This
procedure places each farm and ranch on a fairly comparable basis.
After the information had been completely summarized, some of the more
general results were released in the form of a mimeographed statistical summary to the Baker County Land Use Planning Committee and to the 80 individual farmers and ranchers cooperating in the study. In addition to the summary of the entire study, each cooperator received the results of his year's farm
business. Late in the summer of 1941 a progress report presenting some of
the results of the study was released in Oregon Station Circular 250.
DESCRIPTION OF THE AREA
LOCATION
The area in which this study was made is located in the Blue Mountain
region in those portions of Baker and Union Counties that form the Lower
Powder River watershed (Figure 1). The part lying in Union County includes
no farming land and is in the Whitman National Forest. The area studied can
be divided into two distinct farming districts: the Keating Area and the
Sparta Area.
The Keating Area is, for the most part, located on the valley floor of
Powder River and extends from the Powder River Canyon on the east to
Union County on the northwest, a distance of approximately 15 miles. The
farming land is largely irrigated and is used chiefly for hay production and as
headquarters for the surrounding range areas. The Sparta Area on the other
hand is a dry-farming region located east of the Keating Area and at a much
higher altitude.
TOPOGRAPHY
The southern part of the area consists of rolling sagebrush hills with
occasional buttes rising to 4,000 feet above sea level. The northern part is
rugged and mountainous with some elevations more than 9,000 feet above sea
level.
The valley floor of the Powder River is relatively flat and ranges in elevation from 2,600 to 2,800 feet. The main valley varies in width from I to about
3 miles. The valleys formed by the tributary streams are much narrower, but
are sufficiently flat to permit farming.
FARM ORGANIZATION AND FINANCIAL RETURNS
9
The farm land in the Sparta Area consists of rolling hills varying in elevation from 4,000 to 4,300 feet. The farming land is widely scattered because
of steep slopes, timbered areas, and rock outcrops.
WALLOWA
UNION
COUNTY
COUNTY
IDAHO
GRANT
COUNTY
lii
BAKER
COUNTY
11
MAL+4EUR COUNTY
/
r
FIGURE
-
I.
LOWER POWDER RIVER AREA
BAKER AND UNION COUNTIES. OREGON
Figure 1.
Lower Powder River Area, Baker and Union Counties, Oregon.
SOILS
The valley soils of the Keating Area are of alluvial origin and vary in texture from sandy loams to clay barns. Considerable alkali is. present in these
soils and unless better drainage facilities are made available a serious alkali
problem may arise.
The soils on the cultivated but nonirrigated hill or bench land adjacent to
the main valley are also alluvial but the slopes are steeper, and in general, the
soils are lighter in texture.
The soils of the Sparta Area are for the most part shallow residual soils
decomposed from the underlying volcanic rock. In many places the rock outcrops tend to limit the cultivated areas to relatively small tracts. Good drainage
and the absence of irrigation limit any alkali accumulations.
CLIMATE
No climatic data are available for the specific area in which this study was
made, but information from the United States Weather Bureau at Baker,
approximately 15 miles southeast of the Lower Powder River Valley, should
be representative of the area under consideration.
The region is semiarid with total annual precipitation averaging approximately 13 inches. Over a 48-year period, 33 per cent of the precipitation occurred during winter months, 28 per cent during spring, 18 per cent during
10
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
summer, and 21 per cent during fall months. Most of the winter precipitation
is in the form of snow.
The region is subject to considerable extremes in temperature with a longtime average difference of 41 F. between the coldest and warmest months.
The mean annual temperature (48-year average) is 45.3 degrees.
Summers are characterized by many cloudless, sunny days with relatively
high temperatures all of which are conducive to quick maturity of crops. Rela-
tively late spring frosts limit the choice of crops. In 1938 the latest killing
frost occurred May 17, and the earliest, October 13.
ECONOMIC DEVELOPMENT OF THE AREA
Historical background. The early agricultural development of the area
is closely associated with gold mining. Rich gold strikes were made in the
Sparta Area in 1863 and soon Sparta, or Kooster as it was known then, became
a typical western gold-rush town.
Food supplies for the miners were transported from Umatilla Landing on
the Columbia River by pack-train, so it was natural that local agriculture
should be developed to supply this market. By 1868 agriculture had become
firmly established with considerable irrigation. The cattle and sheep industries
had also started.
By 1890 many of the mines had closed down but the construction of the
Union Pacific Railway opened up many new and permanent markets for the
agricultural products.
During the early development of the area irrigation water was plentiful,
but as more land came under cultivation, the water supply of Powder River
and its tributaries was all utilized and private reservoirs and canals were built.
The Thief Valley storage dam was constructed on the Powder River by the
United States Bureau of Reclamation in 1932. The reservoir has a capacity of
17,400 acre feet. This reservoir now supplies irrigation water to the greater
portion of the cultivated land in the Valley.
Principal towns and communities. There are no incorporated towns
located within the area but there are trading centers with post offices at Sparta,
Keating, and at Medical Springs.
Baker is the chief shipping point and shopping center for the area. It is
a city of slightly less than 9,000 population and is located 15 miles from Keating,
35 from Sparta, and 20 from Medical Springs.
Transportation. The area is served by Oregon State Highway 86, which
begins at Baker, skirts the edge of the Keating Area, and then runs east to
Halfway. Several good county roads branch off from the highway and serve
the Valley farmers.
The county road branching off Highway 86 to the Sparta Area occa-
sionally becomes impassable during the winter months due to heavy snowfall,
leaving the community virtually isolated.
The Union Pacific Railroad has one main line and one branch line serving
the area. The main line operates through Baker. Here many of the cattle and
sheep from the area are shipped to Pacific Coast and midwest markets. The
branch line of the Union Pacific operates from Huntington in southern Baker
County to Robinette on the Snake River near the mouth of Powder River.
Some of the operators find it closer to bring their livestock from summer and
fall range to this shipping point than to Baker.
FARM ORGANIZATION AND FINANCIAL RETURNS
11
The agriculture. The agriculture of the Keating Area is essentially
based on livestock with beef cattle and range sheep predominating. Dairy
cattle, hogs, and farm sheep, however, are common on most farms. The range
livestock enterprises are dependent upon winter feed produced on irrigated
farmland and upon spring, summer, and fall grazing on private and publicly
owned range land and the national forest. (Figure 2.) The cropland is almost
entirely devoted to hay, grain, and pasture to be consumed by local livestock.
Figure 2.
Grazing land along the north side of the Lower Powder River Valley.
90 per cent of the privately owned land is used for grazing.
Almost
The agriculture of the Sparta Area is chiefly dry-farming. Dairy cattle
are the most common kind of livestock while range livestock are of little
importance.
The Keating and the Sparta farming areas are distinctly different, not
only in topography, soils, kinds of livestock, and cropping systems, but also
from the standpoint of size of farms and types of farming. For these reasons
the analysis is presented in two sections. The first section is devoted to the
Keating Area.
The Keating Area
FARM ORGANIZATION
In order to discover and understand the problems of an agricultural area,
it is essential to have a basic knowledge of the types of farming, size of farms,
the land use, crops grown, and the livestock raised in the particular area.
TYPES OF FARMING
Types of farming are usually associated with a long-time program, which
the farmers have found to be best suited to the area and to any peculiarities of
their own farms. The largest portion of the cropland in the Keating Area is
devoted to alfalfa hay and small grains, but the disposal of these crops differs
a great deal between farms. Some farmers raise these crops for direct sale,
others feed their crops to one class of livestock, while still others feed several
classes of livestock.
Farms were classified according to the major source of income. Five
classes or types were found.
Type of farming
Number of farmz
Beef cattle
Range sheep
16
6
Dairy
General livestock
14
17
Crop
8
TOTAL
61
Table 1. RANGES IN SIZE OF FARMS AND AVERAGE SIZE OF FARM BY DIFFERENT MEASURES
OF SIZE
-
Keating Area, Baker County, Oregon, 1939
limser 0
farms
Measure
Total productive man work units"
Man equivalent"
Acres in crop
Total investment"
Total animal units"
61
61
61
61
61
Range
High
Low
Average
100
4,200
2
1,250
$230,000
1,200
$1,000
16
576.5
2.4
162.8
$28,077.0
128.5
" See page 53, Appendix, for explanation of terms.
SIZE OF FARMS
The size of the farming unit may be measured in several ways. Table I
shows the size of the farms in the area and the range between the smallest and
the largest as measured by total productive man work units, man equivalent,
acres in crop, total investment, and animal units.
LAND USE
The proportion of the total acres in each class of land will vary a great
deal on the individual farm, depending upon the type of farming, size of the
farming unit, efficiency of operation, and the financial ability of the operator to
make the adjustments he feels are necessary to achieve the correct combination
of land classes.
Range land, even excluding public domain, is by far the largest single class
of land, comprising 88 per cent of the total acres operated (Table 37, Ap12
FARM ORGANIZATION AND FINANCIAL RETURNS
13
pendix). Cropland is next in importance, accounting for 11 per cent of the
total acres. Of the total cropland, 84 per cent is devoted to crops, 4 per cent
is idle or fallow, and the remaining 12 per cent is cropland pasture.
Eight hundred seven acres, or 7 per cent of the cropland, is without any
form of irrigation while the remaining 93 per cent is irrigated either by surface
irrigation or by subirrigation. Twenty-four of the sixty-one farms have some
cropland that is not irrigated, but the total acres of dry-farmed land is relatively
small when compared with the total acreage of irrigated land. (Figure 3.)
Figure 3.
Crested wheatgrass being grown for seed on unirrigated land.
The acreage for range land does not include publicly owned grazing land
tised under a Grazing Service allotment or a Forest Service permit. In addition
to operating private grazing land, 29 farms had allotments for cattle, 9 had
allotments for sheep, and 7 had Forest Service permits for both cattle and
sheep.
CROPPING SYSTEM
Variation by types of farming. The acreage of the different crops
varies considerably between types of farming (Table 2). Hay is the most
important crop in respect to acreage on all five farming types. The percentage
of croppcd acres devoted to hay varies from 80 per cent on the cattle and
sheep ranches to 48 per Cent Ofl the general livestock farms with an average of
74 per Cent for all farms. The dairy and crop farms have 67 and 71 per cent,
respectively, of their crop acres in hay, so it is apparent that with the exception of the general livestock farms, hay is the major crop. (Table 38, Appendix
and Figures 4 and 5.)
Dairy, general livestock, and crop farms have a considerably higher percentage of their crop acres in grain than either the beef cattle or sheep ranches
although their total acreage is smaller. This is to be expected since relatively
more grain is required for dairy cattle and general livestock than for range
cattle or sheep.
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
14
Table 2. CRoP ACREAGES PER FARM BY TYPES OF FARMING
Keating Area, Baker County, Oregon, 1939
Acres per farm by type of farming
Crop
Hay
Alfalfa hay
Wild hay
Other hay
TOTAL NAY ..
Grain
Barley
Oats
Wheat
Other grains
TOTAL GRATN.
Beef
cattle
Range
sheep
Dairy
General
livestock
Crop
All farms
Acres
Acres
Acres
Acres
Acres
Acres
112.7
80.4
16.1
283.0
43.7
70.3
7.9
1.3
29.3
1.7
3.7
52.8
8.2
5.9
82.5
24.5
13.1
209.2
353.3
52.9
34.7
66.9
120.1
14.9
12.1
8.8
3.7
16.0
25.2
3.3
4.9
7.2
5.5
3.8
5.7
8.6
4.7
11.4
10.2
3.0
15.3
7.8
5.5
2.4
39.5
44.5
21.0
34.0
22.8
32.1
10.7
43.7
1.8
2.2
.8
2.9
.9
.8
.1
2.2
.9
.2
8.6
1.2
.7
.1
14.2
44.5
4.7
2.9
4.6
10.6
262.9
442.3
78.6
71.6
94.3
162.8
7.4
3.1
Mi.ccellaneou.s
New seedings
.
Seed
Garden
Other
TOTAL MISCELLANEOUS
2.4
.1
.4
.2
.6
TOTAL CROP
ACRES
Crop yields. Crop yields may materially affect the income of the farm.
The cost of producing the total crop usually remains relatively fixed while the
yield may vary considerably. Water charges, taxes, interest on investment, and
preharvest labor do not change with variations in yield, white harvest labor
and certain machine costs vary with changes in the yield, but these changes in
expenses are usually comparatively less than the accompanying changes in
yield.
Table 3 gives the 1938 yield, the "usual" yield, and the per cent that the
1938 yield is of the "usual." It is entirely possible that the "usual" yield has
Table 3. 1938 AND "USUAL" CROP YIELDS
Keating Area, Baker County, Oregon, 1939
Per cent
1938 yields
Crop
Alfalfa hay (1 cutting)-Tons
Alfalfa hay (2 cutttngs)-Tou.c
Alfalfa hay (3 cuttings)-Tons
Wild hay-Tons
Wheat-Bushels
Barley-Bushels
Oats-Bushels
ALL CROPS
1938
yield
1.5
2.3
3.7
1.4
29.1
46.9
69.2
"Usual"
yield
1.7
3.1
4.0
1.5
31.9
52.2
66.6
are of
"usual"
yields
Per ceNt
88.8
74.7
91.6
96.1
91.4
89.8
103.5
85.1
FARM ORGANIZATION AND FINANCIAL RETURNS
13
been slightly overestimated by the operators. The widest difference between
the 1938 yield and the "usual" occurred in the case of "two-cutting" alfalfa hay,
The 1938 yield for this crop was 25 per cent less than "usual."
I
Figure 4. Haying lasts all summer on the larger ranches. Wild hay accounts for about
20 per cent of the acreage in hay and about iS per cent of the total crop acreage.
Figure 5. Stacking alfalfa hay on a beef cattle ranch. Two cuttings are usually harvested
while the third crop is pastured. Alfalfa hay averages 113 acres per ranch and accounts
for 43 per cent of the total acres in crop.
16
AGRICULTURAL EXPERIMLNT STATION BULLETIN
O6
Factors affecting crop yields. In this area climatic conditions, soil
fertility, drainage, cropping practices, insect pests, and noxious weeds affect
yields.
Climatic conditions. The freezing out of alfalfa stands, wind damage to grains, and rains while the hay is in the shock are about the only climatic
conditions that affect yields. Precipitation in this immediate area seems to
have little bearing on the water supply under the Thief Valley Irrigation
Project.* Several of the operators who have private water sources, however,
reported a shortage.
Soil fertility. The yields of the Keating Area compare quite favorably with those of the other nearby regions of similar climate and topography
(Table 4). These figures suggest that the Keating Area's soils are as fertile
as those found in the irrigated districts of Malheur County.
Table 4.
1938 CROP YIELDS ON FOUR IRRIGATED DIsTRIcTS IN EASTERN OREGON
Yield per acre
Crop
Alfalfa hay (3 cuttings)Taus
WheatBushels
BarleyBushels
OatsBushels
Keating
area
3.7
29.1
46.9
69.2
Heisig, Carl P., and Clawson, Marion,
Agricultural Economics, 1938, page 100.
t Oregon State Engineer's Report, 1938.
Ontario.
Nyssa
(older
districts)
districts)
Jordan
Valleyt
(new
districts)
4.4
36.5
41.8
57.3
3.4
25.6
28.8
35.8
2.8
25.0
25.9
32.1
ValeR
(new
New Farms on New Land," Bureau of
Drainage. According to the operators, drainage is becoming a problem
on several of the farms in the area. The results of inadequate drainage are
showing up irs the form of wet and marshy land and also in an increasing
a,lkali content of the soil. Although the acreage that has been retired from
cultivation is relatively small, a future, increasingly important problem does
exist.
Insect pests. in many irrigated regions of Oregon that raise alfalfa,
the alfalfa weevil is quite prevalent. At the present time this is especially
true of the Keating Area. According to the farmers of this area, the weevil
has reduced alfalfa hay yields to such an extent that several of the operators
have replaced or supplemented their alfalfa with red clover, which is not
affected by the weevil. In some fields the weevil larvae have made such a
vigorous attack on the alfalfa, especially the first cutting, that the growing
alfalfa takes on a ragged, gray appearance.
The operators of this area reported that the 1938 yield of alfalfa hay was
22 per cent lower than the yield usually received, while the yield for crops
other than alfalfa was 96 per cent of normal. This difference between the 1938
yield of alfalfa and the usual yield suggests that the 1938 yield may have been
materially affected by the weevil.
Noxious weeds. Whitetop, morning glory, Russian knapweed, Canadian thistle, and quackgrass are found. Whitetop is a menace and occurs in
Powder River's main source of flow is derived from its Isead waters located in the
Blue Mountains in western Baker County. Its drainage basin covers about 1,100 square
miles.
FARM ORGANIZATION AND FINANCIAL RETURNS
17
varying degrees of infestation on most of the farms. The operators report that
it is spreading rapidly, but at present has caused no appreciable change in
yields. The extent of the infestation of the other weeds is insignificant at the
present and th.e weeds are confined to relatively few farms.
Crop marketing. The area is relatively self-sufficing with regard to. feed
crops. Only 70 tons of grain were purchased and 42 tons of grain sold outside
the area. One operator purchased and one operator sold his hay outside the
area. Apparently the balance between feed crops produced and the number of
livestock on the 61 farms is relatively close. On the other hand, over 34,000
pounds of the alfalfa seed produced was sold outside the area. Most of this
seed was sold in Baker, but some was sold in La Grande and Ontario.
THE LIVESTOCK PROGRAM
Kinds and numbers of livestock. In this area the animal units of live-
stock per farm vary from 6 to over 1,200 animal units. The average is 128.
Range cattle and range sheep are by far the most important livestock in
the area and account for about 75 per cent of the total animal units.
The sheep ranches have the largest number of animal units and are followed
by the beef cattle ranches, dairy farms, general livestock farms, and crop farms
in respective order (Table 5).
Table 5. ANIMAL UNITS PER FARM BY TYPES OF FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Kind of livestock
Beef
cattle
A U.
166.2
Sheep
Dairy
General
livestock
Crop
All farms
A. U.
A. U.
AU.
AU.
AU.
Workstock
Miscellaneous
15.9
13.6
04.4
376.3
10.2
23.2
13.2
All livestock
219.4
517.3
Beef cattle
Range sheep
Dairy cattle
13.6
10.1.
2.1.
5.0
2.7
22.1
6.8
7.5
7.5
12.3
5.5
7.7
5.8
4.0
55.1
40.6
13.1
10.4
9.3
39.2
30.5
19.3
128.5
Includes horses not worked, hogs, farm sheep, and poultry.
Beef cattle occur on all the types of farming, but are most important on
the beef cattle and sheep ranches. Range sheep are confined to the sheep
ranches with the exception of one instance where the operator of a beef cattle
ranch had range sheep during a short period of the fiscal year. Dairy cattle
occur on all farms, and though they account for only 10 per cent of the total
animal units of livestock in the area, they are the most important class of
livestock on the 39 farms comprising the dairy, general livestock, and crop
farms.
The table indicates that range cattle and range sheep are the most important classes of livestock insofar as total animal units are concerned, but
dairy cattle are the most important on the largest number of farms.
BEEF CATTLE PRACTICES
Beef cattle practices notable for this area include grazing, winter feeding,
breeding practices, and production and sales practices.
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
18
Grazing. The grazing season for beef cattle is divided into three distinct
Spring grazing lasts from early April
until early June and in all cases consists of sagebrush range, either publicly or
privately owned, or both. (Figure 6.)
periods: spring, summer, and fall.
Figure 6.
Note the bunch grass inside the fence. The fenced area on the right illustrates
the importance of sound range management practices.
Several types of summer grazing are available. Eight operators grazed
their cattle on the national forest, 6 used sagebrush range and private timberland, and 2 used farm pasture. Those operators using the national forest
moved their cattle on in early June and took them off in late October.
Most of the operators use a combination of private and publicly owned
range land for fall grazing, but several operators have enough farm pasture
to carry the cattle until winter feeding begins. (Figure 7.)
Winter feeding. Winter feeding usually begins in early December and
lasts until the early part of April. The operators reported that the cattle are
fed about l tons of hay per animal unit or about 750 pounds per month for the
4 months of winter feeding. Some wild hay and clover hay are fed, but alfalfa
constitutes the largest percentage.
Breeding. About 1 bull for every 20 cows is used. The largest operators
keep the bulls well scattered among the cows. Over 70 per cent of the bulls
are Herefords, the remainder are Angus and Shorthorn.
Production and sale of beef cattle. The per cent calf crop is the nuin-
ber of calves weaned as a per cent of the number of cows at breeding time.
The calf crop is for 1938 and not 1939 since the fiscal year covered by the
study ended on May 31, 1939 and all the 1939 calves had not been born by
that time.
FARM ORGANIZATION AND FINANCIAL RETURNS
19
The percentage calf crop varies from 50 per cent to 100 per cent with an
average of 72 per cent. The data reported by the operators indicate that they
'usually" received an average calf crop of 77 per cent. The average number
of cows per beef cattle ranch is about 89 head. Over one-third the ranches
have less than 50 head. This small number permits a closer watch over the
cows during breeding and calving. These practices have a tendency to increase
the calf crop on the smaller operating units.
I
Figure 7.
\Vild hay meadows, where available, provide summer and fall grazing.
About half the beef cattle are sold grass fat and are shipped in late summer or early fall. The others are grain fed on home ranches. The largest
percentage of the cattle are shipped to Portland. Local and midwestern markets account for the remainder. The weights of the cattle sold and the average
farm prices received per pound for the different classes of cattle are given in
Table 6. The operators reported an average farm price of $7.20 and $5.50
respectively for two-year-old and yearling steers. This compares with an
average of $6.73 for the farm prices of fat steers in Baker County during the
10-year period 1926-1935. Oregon Station Circular of Information No. 161.
Table 6.
BEEF CATTLE WESGHTS AND AVERAGE FARM PRICEs RECEIVED rOR BEEF CATTLE
SoLD
Keating Area, Baker County, Oregon, 1939
Prices received i-n 1933
Class
Cow
Heifers 2's
Heifers l's
Bulls
Weight
per head
Pounds
1,041
728
635
Per
hundredweight. -
$5.40
6.70
5.20
Per head*
$54
45
27
65
65
34
7.20
Steers 2's
982
645
Steers l's
5.50
The average price per hundredweight times average weight per head will nut give
the price per head, since the price per head includes beef cattle whose weights are .not
known.
20
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
RANGE SHEEP PRACTICES
Two different methods of lambing are practiced in eastern Oregon; early
lambing and late lambing. Early lambing means lambing while the ewes are on
hay during February and March. The lambs are sold in July and August.
Late lambing means lambing in April when the ewes are on the spring range.
The lambs are marketed in the fall.
Those operators who practice early lambing must have heavier lambs and
a higher percentage lamb crop in order to offset the additional expense entailed
by sheds and heavier feeding.
Conditions of the Lower Powder River Area are well adapted to early
lambing and the six sheep operators included in this study follow that practice.
There appears to be plenty of good hay at a reasonable price for winter feeding,
and the grazing is good enough to permit fat lambs to be marketed in late
July and early August.
Grazing. The grazing period for sheep is similar to that of cattle. Spring
grazing lasts from about the first of April to the first part of June, and consists of grazing on either privately or publicly owned sagebrush range land, or
both. Summer grazing extends from June to the middle of September and is
located on the Whitman National Forest (Figure 8). Fall grazing lasts from
the time the sheep are moved off the forest until winter feeding begins. During this last period, sheep are grazed on sagebrush range land, crop aftermath,
or irrigated pasture.
1
I
Figure 8.
All the range sheep in this area are grazed on the national forest during the
summer months.
Winter feeding. Winter feeding usually begins near the first of December and lasts until about April 1, depending on the weather. During this period
the sheep are fed about 600 pounds of alfalfa hay per head or about 5 pounds
per day.
Replacements. Sometime during the fall adjustments are made in the
number of breeding ewes for the ensuing year. At this time, on account of
FARM ORGANIZATION AND FINANCIAL RETURNS
21
age or other defects, ewes that would not be profitable to keep for another year
are culled out and sold. The method of replacement differs between operators;
two operators made no replacements during the year of the study; two made
replacements with their own ewe lambs; one purchased ewe lambs; and the
other operator purchased yearling ewes. The average addition to ewes made in
the fall of 1938 totals 24.9 per cent of the breeding ewes. Seven and threetenths per cent of replacements occurred because of death loss and 12.4 per
cent occurred as a result of culling aged and barren ewes. The remaining 5.2
per cent addition represents an increase in the number of ewes over the number
the previous year.
Breeding. After adjustments in the number of ewes have been made, the
bucks are turned in with the ewes at the rate of about 1 buck to 50 ewes.
They remain with the ewes for 1 to 2 months. The bucks are usually of the
Hampshire type.
Lambing. Weather conditions at lambing time are usually quite severe,
and the use of heated lambing sheds is an accepted practice. After the lambs
are dropped the ewes and lambs are taken from the lambing shed to outside
shelters where they remain until the lambs will stay with the ewes in larger
pens or corrals.
Shearing. In the latter part of June, the ewes and lambs are trailed from
spring range to shearing corrals where the ewes are shorn and the ewes and
lambs counted. The shearing is contracted on the head basis to professional
shearers. During 1939 the shearing rate averaged about 18 cents per head.
Production and sale. The production of wool per ewe on the different
ranches ranged from 8.8 pounds to 10.7 pounds. The average for all ranches is
10.1 pounds. The average for the state during the same period is 8.9 pounds.
The average price received by the six operators in this study for the 1939
clip was 20.4 cents. Over the 10-year period 1926-1935 the farm price of wool
in Baker County averaged 22.9 cents per pound.* The wool is usually sold
during the summer, either through a wool pool or through private concerns.
The average lamb crop in this study is computed on the number of lambs
at shearing time and the number of ewes at breeding time. The 1939 lamb
crop per ranch varied from 93 per cent to 126 per cent with an average for all
sheep ranches of 113 per cent. The operators reported that they usually received a lamb crop that averaged 112 per cent, so there appears to be very little
difference between the 1939 and "usual" lamb crops. The lamb crop is based
on the lamb count at shearing time in May and not the number of lambs at
market time in July or August. It is evident, therefore, that the lamb crop
would have been lower if computed when the lambs were marketed, because
of the death loss of lambs between shearing and marketing.
Lambs are marketed as fat lambs during the latter part of July and early
Those to be sold are separated from the ewes while on the national
forest and are either trailed or trucked to the railroad shipping point. The
lambs are then consigned to midwestern markets including Denver, Omaha,
August.
Kansas City, and Chicago.
The weight of lambs sold from the different ranches varied from 78 pounds
to 87 pounds. The average weight for all lambs sold in 1938 was 82 pounds.
This is almost identical with the weigh± that the operators indicated as "usual."
Oregon Station Circular of Information No. 161.
22
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
The average farm price received for lambs sold dttring the summer of
1938 was $6.83 per hundredweight or $560 per head. The 10-year average
farm price (1926-1935) received for fat lambs in Baker County was $7.57 per
hund redweight.*
Dairy farm practices. The dairy cattle are for the most part a mixture
of beef and dairy stock. This mixture results from the common practice of
using beef bulls on dairy cows. The mixed breeding undoubtedly contributes
to the area's low butterfat production.
The dairy cows are pastured during the spring, summer, and fall months
on irrigated pasture, or on range land if no irrigated pasture is available. On
the average, each cow received from 2 to 2 tons of hay during the year.
Butterfat production per cow ranged from 340 pounds to less than 100
pounds, with an average for the study of 204 pounds. The state average for
1939 is approximately 236 pounds. Of the total butterfat produced, 68 per
cent was sold, 17 per cent was used in the home, and 15 per cent was fed to
farm livestock. The amount of butterfat, in the form of whole milk fed to
calves, averaged 32 pounds per calf, or when measured in terms of value about
$7.60 per calf.
The butterfat is sold in the form of churning cream and is picked up at
the farm by the creamery's truck and delivered to Baker. The average farm
price received by the farmer for butterfat averaged 24 cents 'per pound.
Miscellaneous farm livestock practices. Income from poultry, farm
sheep, and hogs is important to many of the smaller operators.
Poultry. The poultry enterprises consist entirely of farm flocks. None
of these flocks have more than 200 hens and average about 50. The average
production amounted to 9.8 dozen or 118 eggs per hen. The eggs sold brought
an average price of 21 cents per dozen.
Farm sheep. Farm sheep consist of ewes and lambs kept on the farm
during the entire year. Most of the flocks have about 50 ewes. Several
operators have no ewes, but obtain "orphan" or "bummer" lambs at no cost
from range sheep operators.
The weight per fleece and the per cent lamb crop for the ewes in the farm
flocks were lower than for range ewes. The fleece weight averaged 8.7 pounds
and the lamb crop, based on lambs on hand June 1, 1939, averaged 97 per cent.
The operators indicated that their "usual" lamb crop was 100 per cent.
The farm lambs sold were heavier than the range lambs. On the average
they weighed 86.6 pounds and brought a farm price of 6.9 cents. The operators'
reported that their lambs "usually" weighed 84.4 pounds when sold.
Hogs. The production of hogs is important on many of the farms and
much of the grain, especially barley, is marketed through hogs.
Approximately 60 per cent of the sows farrow in the spring and the remainder farrow in the fall. The spring litters averaged 6.4 pigs saved per litter
while the fall litters averaged 6.8 pigs. The average number of pigs saved per
litter for both spring and fall was 6.6, which is exactly the 10-year state
average for Oregon.
Most of the hogs are sold in Baker and then shipped to Portland. The fat
hogs sold averaged 196 pounds per head and brought an average of $7.37 per
hundredweight.
See Table 40, Appendix, for a list of imivesiments per cattle unit.
FARM ORGANIZATION AND FINANCIAL RETURNS
23
DISTRIBUTION OF FARM INVESTMENT
There is a wide variation in total farm investment between range livestock
ranches and other types of farming (Table 7). The total capital invested in
sheep ranches is almost twice greater than the capital invested in cattle ranches,
and cattle ranches in turn are over four times larger by investment than dairy,
general livestock, and crop farms.
LAND
Land represents 58 per cent of the total farm investment. By types ,jf
farming, the investment in land varied from 54 per cent on sheep ranches to 70
per cent on crop farms. All livestock farms had relatively less of their total
farm capital invested in land than did the eight crop farms. It should be noted
that although the sheep and cattle ranches had a smaller proportion of their
total investment in land than the crop farms, the total investment in land was
much greaterthe sheep ranches' investment in land being seven times larger
and the cattle ranches' four times larger than the crop farms.
LIVESTOCK
Livestock represents the second largest item included in total farm investment. It varies from 8 per cent on crop farms to 30 per cent on sheep ranches.
The percentage investment in livestock on sheep and cattle ranches may be
considerably lower than on similar types of ranching in other parts of the
country. It must be remembered, however, that the ranch outfits in this area
winter feed their livestock for a period of four months, and practice shed
lambing. These methods of handling livestock entail a considerably higher
investment in land, buildings, and equipment (therefore a lower percentage
investment in livestock) than would be necessary on outfits depending on winter
range, with small amounts of hay and grain being fed.
BUILDINGS
The sheep and cattle ranches had a much greater investment in buildings,
but when expressed as a percentage of the total ranch investment this item
was smaller than for any of the other three farming types. This condition is
ordinarily expected on large farms, because of the operator's tendency to have
as much of the total capital as possible invested in the direct productive agents,
land and livestock. The per cent investment in buildings varied from 8 per
cent on sheep ranches to 17 per cent on dairy farms, vith an average of 10 per
cent for all farms.
MACHINERY AND EQUIPMENT
Farm machinery and equipment consisting of nonpower and power equipment; tractors, combines, farm trucks, and the farm share of the automobile,
accounted for 6 per cent of the total capital investment for all farms. By types
of farming the per cent of total investment ranged from 4 per cent on sheep
ranches to 10 per cent on crop farms. The sheep ranches had the largest
investment while dairy farms had the smallest. For the most part, the relatively large investment in machinery and equipment on sheep ranches results
from these outfits having so many more acres in crops than the other types of
Table 7.
DISTRIBUTION OF TOTAL FARM INVESTMENT BY TYPES OF FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Item
All farms
Dairy
General livestock
Crop
Average Per cent Average Per cent Average Per cent Average Per Cent Average Per cent Average Per cent
Sheep
Beef Cattle
$27,757
89.9
$49,044
53.9
$ 6,025
56.5
$ 6,149
59.7
$ 7,731
70.2
$16,215
58.2
Livestock
11,725
25.3
27,227
29.9
1,728
16.2
1,420
13.8
903
8.2
6,664
24.0
Buildings
4,217
9.1
7,242
7.9
1,846
17.3
1,679
16.3
1,157
10.5
2,861
10.2
Machinery and equipment
2,124
4.6
4,217
4.6
919
8.6
947
9.2
1,107
10.0
1,592
5.7
477
1.1
3,259
3.7
147
1.4
101
1.0
124
Li
525
1.9
$46,300
100.0
$90,989
100.0
$10,665
100.0
$10,296
100.0
$11,022
100.0
$27,857
100.0
Land
Miscellaneous
TOTAL FARM INVESTMENT
As of June 1, 1938
FARM ORGANIZATION AND FINANCIAL RETURNS
25
farming. Also they have a considerable investment in camp and pack equipment, which usually does not occur on the other types of farming.
FINANCIAL SUMMARY
FARM RECEIPTS
The receipts on the sheep and cattle ranches were much larger than on
the other types of farms (Table 8 and Table 39, Appendix). Of the total
$328,624 cash receipts for 61 farms, $276,154 or 84 per cent is derived from
the sale of livestock and livestock products, 10 per cent is from the sale of
crops, and 6 per cent is from miscellaneous sources. Agricultural Adjustment
Administration payments made up the largest share of the miscellaneous items,
being 3 per cent of the total cash receipts or 55 per cent of the miscellaneous
receipts.
The cash sale of livestock and livestock products accounted for 95 per cent
of the total receipts on the sheep ranches, 82 per cent of the total receipts on
the cattle ranches, 51 per cent on the dairy, and 58 per cent on the general livestock farms. On the crop farms, 50 per cent of the total receipts were derived
from sales of crops.
Table 8.
FINANCIAL SUMMARY flY TYPES OF FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Beef
cattle
Sheep
Dairy
receipts
$ 8,381
$20,396
$ 1,883
increase
356
277
834
$ 8,737
$20,673
5,149
511
Item
General
All
Crops
farms
$ 1,762
$ 2,075
$ 5,400
233
485
440
$ 2,717
$ 1,995
$ 2,560
$ 5,841
13,923
1,680
1,153
1,262
3,593
470
164
190
168
293
$ 5,660
$14,393
$ 1,844
$ 1,343
$ 1,430
$ 3,886
3,077
6,280
873
652
1,130
1,955
592
616
404
359
317
450
1,859
3,645
443
417
451
1,218
2,635
430
235
679
973
1,351
677
663
600
807
-11
-.1
530
1,148
4.7
4.1
$28,077
livestock
Receipts:
Total cash
Inventory
TOTAL FARM
RECEIPTS
Expensc.t:
Total cash
expenses
Unpaid family
labsr
Inventory
decrease
TOTAL FARM
EXPENSES
NET FARM
I N CO ME
Farm furnished
living
Interest on invest
ment at 4 per
cent
OPERATOR'S LAROR
INCOME
Value of operator's time
Return on invest.
merIt
PER CENT RETURN
ON INVESTMENT
2,104
4,929
196
4.5
5.4
1.8
$91,127
$46,478
$11,082
$10,413
$11,264
Total investment
For a detailed listing of receipts and expenses see Table 39, Appendix.
1,12
832
26
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
FARM EXPENSES
The sheep and cattle ranches are larger and they spend relatively less for
machinery and equipment expenses. They spend a higher percentage for labor
and board, however, since the operators cannot do as much of the work themselves.
The average expense foreach farming type includes a wage estimated
by the operator for the work performed by the unpaid members of the
operator's family.
NET FARM INCOME
Net farm income is secured by subtracting the total farm expenses from
the total farm receipts after all inventory changes have been accounted for.
It is the income from which the operator's wage for his labor and management
and the interest on total farm capital must be paid. The net farm income
received by the operators varied from $6,280 on the range sheep ranches to $652
on the general livestock farms. The average for all farms was $1,955.
FARM-FURNISHED LIVING
In addition to the net farm income, these families also received noncash
items in the form of farm-furnished food and a home to live in. The average
value per farm for farm-furnished living is $450, of which $64 is garden
produce, $78 livestock, $124 livestock products, $38 wood, and the remaining
$146 is rent on the farm dwelling. The farm-furnished food is valued at
wholesale. The rental value of the home is figured at 10 per cent of the
inventory value of the house.
LABOR INCOME
Labor income measures the income of the farm operator after the influence of size of business; namely, total farm capital has been removed. When
4 per cent of the total capital per farm is subtracted from the net farm income
the remainder or labor income is the amount that the operator has earned for
his year's labor and management, not including farm-furnished living.
There is a wide variation in labor income between the different types of.
farming (Table 8). The probable reasons for this variation will be discussed
later. The range sheep ranches received the highest labor incomes, whereas
the general livestock farms received the lowest. The average for all farms
was $832. It is interesting to note that the average labor income received by
the operators is $25 greater than the average amount that they estimated
their labor and management to be worth.
VALUE OF OPERATOR'S WAGE FOR LABOR AND
MANAGEMENT
In many economic studies an arbitrary wage for the operator's labor and
management has been assigned to the operator, usually depending on the size
of his business. In this study the operators estimated the wage for their own
labor and management. The average value of the operator's wage for each
type of farming is as follows: beef cattle ranches, $973; sheep ranches, $1,351
dairy farms, $677; general livestock farms, $663; and crop farms, $600.
27
FARM ORGANIZATION AND FINANCIAL RETT.:RNS
RETURN ON FARM INVESTMENT
The per cent return on farm investment averaged 4.1 per cent for all
farms. This figure is calculated by subtracting the value of the operator's wage
from net farm income and dividing the remainder by the total farm investment.
REPRESENTATIVENESS OF DATA
The previous discussion has pointed out that on the average the operators
for the one year made no extremely large nor extremely small incomes, but
earned a fair rate of return on their investment, about 4 per cent, and were
paid a wage that was slightly more than they considered their year's labor and
management to be worth.
Since the data in this report represent only the one year, June 1, 1938 to
May 31, 1939, it is important to know whether this is a typical year.
It is
impossible to say whether the period of this study will be representative of
future years, but a comparison of the 1938 data with long-time averages may
prove helpful.
Table 9.
COMPARISON OF 1938 FARM Pisicas TO 10.YEAJS AVSRAGE FARM PRICES (1926.1935)
FOR BAKER COUNTY
Keating and Sparta Areas, Baker County, Oregon, 1939
Prices
Item
WheatBushel
OatsBushel
BarleyBushel
Steers (fat)Hundredwesght
Lambs (fat)Husvdredwesght
Hogs (fat)Hundredwesght
WoolPounds
ButterfatPounds
EggsDozen
reported
by farmers
for 1938
$0.58
.32
.45
7.14
6.83
7.37
.20
.24
.21
10-year
average
farm prices
received
(1926.1935)"
$0.82
.43
.59
6.73
7.57
7.77
.23
.34
.26
Oregon Station Circular of Information No. 161.
Crop yields and livestock production.
The farmers reported their
crop yields in 1938 as being approximately 15 per cent lower than yields
usually" received. Livestock production rates including calf crop, lamb crop,
and livestock weights were essentially the same as "usual."
Prices. The prices received for farm products sold during the period
varied considerably from the 10-year average farm prices for Baker County
(Table 9). Farm prices received for crops in 1938 were much lower than for
the 10-year average, but the prices received for livestock in 1938 will average
about the same as those received in the period 1926-1935. Consequently, 1938
appears to be a fairly typical year insofar as prices are concerned, but below
normal with respect to crop yields.
SOME REASONS FOR VARIATION IN INCOME
The following discussion deals with the reasons why certain farms receive
a greater income than others. Each type of farming has inherent characteristics
that distinguish it from other types of farming. Factors associated with the
28
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
variation in income on one type of farming, therefore, may be different or
may be of different magnitude than those on another type of farming. For
these reasons the analysis will attempt to point out strong and weak points
within types of farming. In the following discussion it must be remembered
that the period covered by this study represents only one year, and whether or
not this year will be typical of future years is beyond our knowledge. It has
been pointed out in the previous discussion, however, that this is a fairly typical
year insofar as the past is concerned.
BEEF CATTLE RANCHES
The average financial income received by the operators of beef cattle
ranches is neither extremely high nor low, but it is large enough to pay all
ranch expenses, pay the operator $1,218 for his labor and management, and
return 4 per cent interest on the total ranch investment. The incomes of the
individual operators were subject to considerable variation. The highest labor
income received was over $5,000 and the lowest was a loss of approximately
$2,000 with an average for all ranches of $1,218. Naturally this variation in
income is a result of definite causal factors. The following discussion will
attempt to point out certain of these factors as revealed by this study.
Per cent of total investment in livestock.* The per cent invested in
livestock gives the relative importance of the investment in livestock to the total
ranch investment. The data indicate that increases in percentage investment in
livestock are accompanied by increased labor income (Table 10). Gross re-
turns per cattle unit were considerably lower on ranches having the largest
relative investment in livestock. This, however, was more than offset by
lower feed, labor, and land charges per cattle unit. The outfits with the highest
percentage investment in livestock had livestock returns above feed and labor
costs averaging $6.40 per cattle unit, whereas the group of ranches having less
than 10 per cent invested in livestock received a minus 40 cents for the same
item.
Table 10.
PER CENT INVESTMENT IN LWESTOCIC AND INCOME ON 16 BEEF CATTLE
RAN CUES
Keating Area, Baker County, Oregon, 1939
Per cent investment
in livestock
Group
Average
Number of
ranches
Labor
income
Number
Cattle
units
Livestock
returns
per
Land
charge
per
cattle unit
cattle unit'
Per cent
Under 20
20 to 30
30 and over
22.9
42.3
8
4
434
942
2,553
114.7
189.0
321.2
$34.00
80.80
22.50
$14.20
8.50
4.80
All beef cattle
ranches
25.3
16
$1,218
203.5
$28.00
$ 740
9.6
4
$
See pages 53-54 Appendix, for explanation of terms.
It is commonly said that the investment in livestock should be equal to the
investment in land. These ranches did not attain this ideal but the nearer they
came to it the higher the labor income.
* See Table 40, Appendix, for a list of investments per cattle unit.
29
FARM ORGANIZATION AND FINANCIAL RETURNS
Feeding. Relatively heavier feeding of breeding stock was associated
with a larger calf crop and higher gross returns per cattle unit, but the added
returns were not enough to pay the added cost. In this area, labor income is
affected very little by the amount of hay fed per hay-consuming animal unit
even though the calf crop and returns per cattle unit were higher on the
ranches feeding the most hay (Table 11). The group of ranches feeding 2.4
tons of hay per hay-consuming animal unit received the highest livestock return
per cattle unit, but higher feed costs reduced the livestock return above feed
costs to a figure below that of the group feeding 1.77 tons per animal unit.
Table Ii.
TONS HAY FED PER HAY-CONSUMING ANIMAL UNIT AND INCOME
ON 16 BEEF CATTLE RANCHES
Keating Area, Baker County, Oregon, 1939
Tons hay fed per
hay-consuming
animal unit
Group
Livestock
returns
.Aversge
1.11
1.77
2.40
Under 1.5
1.5 to 2.0
2.0 and over
Table 12.
Number of
ranches
6
6
4
Livestock
returns
above
feed Costs
Labor
Per cent
income
Number of
cattle units
calf crop
per
cattle
unit
per cattle
unit
$1,070
1,526
975
234.5
235.5
67.0
73.7
71.0
$24.00
29.30
36.60
$14.20
18.40
16.60
108.9
I
RATE OF FEEDING AND INCOME ON 16 BEEF CATTLE RANCHES
Keating Area. Baker County, Oregon, 1939
Livestock
Value feed fed
per cattle unit
Group
Under $10
$10 to $15
$15 and over
Figure 9.
Number of
Average ranches
Labor
income
8 7.20.
$2,896
12.60.
19.50
4
7
5
899
321
returns
Livestock
above foed
$23.70
31.20
31.90
$16.50
Number of returns per costs per
cattle units cattle unit cattle Unhl
372.0
152.7
139.7
1 8.60
12.40
Acres
private
range per
cattle unit
13.5
22.9
28.3
About one-half of the steers are fattened on the home ranch before being sold.
30
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
Hay fed is not the best measure for the feed consumed on beef cattle
ranches since several of the operators fatten their steers before marketing
(Figure 9). For this reason the total value of feed fed (including hay and
grain) may be better than hay fed as an indicator of any relationship'existing
between the amount or value of feed fed and the labor income received.
The ranches spending the least amount for feed per cattle unit received
the largest labor income, although their per cent calf crop and gross returns per
cattle unit were less than on the ranches feeding the heaviest (Table 12). The
lower feed and labor costs and the larger number of cattle per ranch more than
offset the larger returns. This indicates that heavy feeding may be carried
too far.
Cattle units per man. The labor expense per cattle unit including a
wage for the operator, amounts to more than the value of feed fed. The
average labor expense per cattle unit is $12.40, while the average value of feed
fed per cattle unit (value of grazing on range and pasture not included)
This accounts for all men, including the operator, whether
they took care of livestock or worked in the field.
amounts to $11.60.
The ranches having more than 60 cattle units per man were far more
profitable than ranches having less than 50 cattle units per man (Table 13).
The ranches using the most labor (least number of cattle units per man) had a
S per cent higher calf crop and had higher livestock returns per cattle unit than
ranches using the least labor, but the added returns did not offset the added cost.
Ranches with more than 60 cattle units per man received a livestock return of
$7.90 per cattle unit above feed and labor costs. The ranches with less than
50 cattle units per man received only $1.80 per cattle unit above feed and
labor costs.
In general the more efficient ranches were able to take care of more livestock per man due to the fact that they had over twice as many livestock as
the least efficient ranches. A larger number of cattle units per man usually
occurs on the larger ranches, for it is one' of the internal efficiencies normally
resulting from large scale operation.
Size of ranch. The data show that the larger ranches were distinctly
the more profitable (Table 14); A study of the various items, however, indicates that the larger ranches differed not only in size, but in organization and
management as well. Compared with the smaller ranches, they spent much less
per head on feed and labor. They also use more public range and less private
range, thus making their land costs less. The expenses of the larger ranches
are therefore much smaller throughout. These economies are accompanied by
a slightly smaller calf crop and a lower gross livestock return per head, but
the livestock return above feed and labor costs per head was very much
greater.. In other words, the larger ranches were able to make major reductions
in their expenses with only slight reductions in returns. These differences
would seem to be due to management as well as to size of business; at least the
data show no reason why the smaller ranches should have such heavy expenses.
The indications are that the smaller ranches are being operated on the plan of
using a large amount of feed and labor per head of livestock with the hope
that the returns would be enough larger to make the operation profitable.
Whether this program is intentional or unintentional, the results are Unsatisfactory.
Comparison of high and low income ranches. A detailed comparison
of these two groups is given in Table 15. This table brings out some striking
Table 13. LABOR EFFICIENCY AND INCOME ON 16 BEEF CATTLE RANCHES
Keating Area, Baker County, Oregon, 1939
Cattle Units per man
Number of
cattle
units
return per
cattle unit
686
109.8
722
171.7
4
2.759
106.0
60 and over
See page 54, Appendix, for explanation of terms.
398.5
Group
Under 50
50to60
Number of
ranches
Average
41.1
6
56.8
6
Table 14.
Labor
income
$
Livestock
Livestock
return above
feed and
labor costs
Labor cost
per cattle
per
Total
ranch
investment
Unite
cattle unit
$34.40
$17.80
13.50
$ 1.80
-1.10
$32,255
27.60
25.50
9.50
7.90
72,206
43,549
NUMBER OF CATTLE UNITS PER RANCH AND INCOME ON 16 BEEF CATTI.E RANCHES
Keating Area, Baker County, Oregon, 1939
Cattle Units per ranch
Group
Under 125
Number
of
ranches
Average
101.2
125 to 200
167.7
200 and over
362.0
Labor
income
Led per
cattle
unit
Labor
Livestock
returns
per
cattle
above feed
and labor
costs per
Unit
cattle unit
cost
Per cent
calf crop
Acres
private
range per
cattle unit
Land
charge
per
cattle
unit
588
$15.50
$18.80
$-1.80
73.9
29.0
$10.00
5
1,357
14.20
12.90
2.30
70.0
25.3
8.70
5
1,834
9.10
10.10
6.60
70.5
14.1
6.00
6
i
Value
feed
$
32
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
facts. The first is that the returns per cattle unit on the high income ranches
are not higher but are lower than on the low income ranches. The larger net
income must therefore come from lower costs rather than from a larger gross
return. This is confirmed by further examination of the data. These data
show that the high net income ranches have (1) a lower investment per cattle
unit; (2) lower feed costs; (3) lower labor costs; (4) lower land charges;
and (5) lower machine costs. In spite of these lower costs they get larger
calf crops and larger calf yields. The conclusion seems inescapable that good
cattle management in this area reQuires the most rigid economy as to feed,
labor and land charges, and that these economies can be and often are combined
with a gross livestock return per head that is at least average, although not
necessarily top. This type of management was found most commonly on the
larger ranches, but not exclusively so. The opposite type of management was
found most commonly on the smaller ranches, but here again there are exceptions because the five low income ranches were approximately average in size
as measured by the total ranch investment.
Table 15.
CoMPARISON op HIGH AND Low INCOME BEEF CATTLE RANCHES
Keating Area, Baker County, Oregon, 1939
Five high
income
ranches
Item
Five low
income
ranches
Labor income
$ 3,138.00
$
Capital accumulation per year
Total ranch investment
Acres in crop
Number cattle units
Investment per cattle unit
Per cent calf crop
Livestock returns per cattle unit
Value feed fed per cattle Unit
Livestock returns above feed costs per cattle unit
Labor costs per cattle unit
Livestock returns above feed and labor costs per
cattle unit
Land charges per cattle unit
Acres private range per cattle unit
Grazing fees per cattle unit
Cattle units per man
Machine cost per crop acre
Crop mdcxc
$ 1,302.00
$65,267.00
$
Pr cent return on investment
7.1
$
$
$
$
$
$
$
$
388.4
344.8
189.00
72.7
26.30
7.80
18.50
9.20
9.30
5.50
15.0
0.50
95.0
2.30
117.1
-368.00
-1.0
15.00
$44,500.00
218.4
167.1
266.00
$
67.0
27.80
$
14.50
$
12.30
$
15.10
$
$
$
$
-1.80
9.70
20.0
0.38
54.6
4.70
111.0
All 16
beef cattle
ranches
$ 1,218.00
4.5
721.00
$
$46,478.00
262.9
203.5
228.00
$
$
$
$
$
$
$
$
$
71.0
28.00
11.60
16.40
12.40
4.00
7.40
19.9
0.45
66.8
3.10
112.4
See pages 53.54, Appendix, for explanation of terms.
SHEEP RANCHES
The high income sheep ranches were not only the most successful during
the 1 year, but also were most successful over a long period of time (Table 16).
They had increased their net worth $2,315 per year for a period of 16 years.
The low income ranches had a capital accumulation averaging $716 for 12
years.
The high income ranches included a one band and a two band outfit.
Each of the low income ranches had one band. The general plan of management for both groups is similar. The investment per head, the number of sheep
per crop acre, and the number of sheep units handled per man are about the
same in both cases. The weight of lambs, the wool clip, and the total of feed
and labor costs also were almost identical for each group. (Figure 10.) The
FARM ORGANIZATION AND FINANCIAL RETURNS
33
Table 16. COMPARISON OF HIGH AND Low INCOME SHEEP RANCHES
Keating Area,
aker County, Oregon, 1939
Two high
ranches
Labor income
Per Cent return on investment
Capital accumulation per year
Total ranch investment
Acres in crop
Number sheep units
Number ewes
Man equivalent
Sheep units per man
Per cent lamb crop
Weight of lambs marketed
Pounds wool per ewe
Per cent death loss
Livestock returns per sheep unit
Value of feed fed per sheep Unit
Labor cost per sheep unit
Livestock returns above feed and labor costs
per sheep unit
Land charges per sheep unit
Acres of private range per sheep unit
Grazing fees per sheep unit
Machine cost per crop acre
Crop index
ranches
$ 3,302.00
$
$ 2,315.00
$69,910.00
$
7.0
248
2,038.5
1,775.0
5.95
343
120.9
81.0
$
$
$
$
$
$
$
9.6
5.5
7.70
2.40
2.60
2.70
.89
2.4
.10
7.50
97.7
All six
sheep
ranches
Two low
income
income
Item
645.00
2.2
716.00
$47,506.00
177
1,422.0
1,225.0
4.12
$ 2,635.00
5.4
868.00
$91,127.00
$
442
2,470.5
1,482.0
6.8
363
345
114.3
82.0
9.7
8.5
$
$
$
$
$
$
$
6.50
2.10
3.00
$
$
$
1.40
1.20
3.2
.14
8.00
85.0
$
$
$
$
113.4
82.1
10.1
7.3
6.70
2.20
2.30
2.20
1.09
2.5
.08
5.00
84.0
' See page 53, Appendix, for explanation of terms.
high income ranches, however, had a higher lamb crop, a lower death loss,
lower land charges, higher crop yields, and smaller machine costs per crop acre.
The high income ranches were not especially outstanding in any one par-
ticular phase of management, but in several; so that when all these factors
are takers together the more successful ranches had gross livestock returns
I
Figure 10.
The lambs were sold off the national forest during July and August and
averaged 82 pounds per lamb.
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
34
averaging $2 higher, and net livestock returns averaging $1.30 higher than the
low income ranches. Considering the complete ranch business, the high income
ranches received a labor income of $160 Ocr sheep unit, as compared to $45
for the less successful outfits.
DAIRY FARMS
Dairy farms received next to the lowest average labor income of any of
the five types of farming. The labor income varies from minus $248 to $1,126
with an average of $430.
Feeding. The rate of feeding has a very definite effect on the labor
income (Table 17), Increases in feed are accompanied by increases in labor
income, pounds of butterfat per cow, labor expense per cow, and crop yields.
Although the group of farms feeding the most received the largest labor
income, the highest butterfat productkn per cow, the ]ivestock return above
feed costs per productive animal unit was highest in the middle group. An inspection of the individual records reveals that increases in the value of feed fed
per productive animal unit up to $20 are accompanied by relatively steady
increases in net returns. Feeding above $20 per productive animal unit was
on the average unprofitable. Of the seven farms feeding more than $20, the
increased feeding was profitable in five cases and unprofitable in two. The
cows on these two farms may have been of such poor quality that heavy feeding
would not increase the returns to any great extent.
Table 17.
RATE OF FEEDING AND INCOME ON 14 DAIRY FARMS
Keating Area, Baker County, Oregon, 1939
Livestock
Value feed fed
per animal unit
Livestock
return
returns
above
feed costs
per productive
animal
unit
Pounds
butterfat
per cow
Crop
index
$42.40
$30.70
42.20
34.20
167.5
193.6
233.8
77.4
88.4
102.5
14
$55.00
$19.30....
$430
See page 53, Appendix, for explanation of terms.
$35.70
195.0
90.0
productive livestock
Average
Group
Under $15
$15 to $25
$11.70....
20.00....
31.10....
$25 and over
Number
of farms
Labor
income
5
289
436
566
4
5
per pro.
ductive
animal
unit
62.20
65.40
All dairy farms
Table 18.
SIZE OF FARM AND INCOME ON 14 DAIRY FARMS
Keating Area, Baker County, Oregon, 1939
Total productive
man work units
per farm
Under 300
300 to 500
500 and
over
j
returns
Number of
Maclime
cost per
crop acre
17.0
8.8
$5.00
6.30
227.9
270.4
$41.50
38.40
20.7
4.10
276.2
31.30
Number of
farms
Labor
income
L milk cows
229.8
380.6
5
4
$362
450
575.6
5
483
Average
Group
Livestock
Productive above feed
costs per
man work
productive
units
per man animal unit
FARM ORGANIZATION AND FINANCIAL RETURNS
35
Undoubtedly the efficiency of management and labor, the quality of livestock, and the peculiarities found on the individual farm will determine the
feeding policy, but it may prove helpful to know some of the problems that
arise in case a change in feeding is contemplated.
Size of farm. The five largest dairy farms received a labor income of
$483, while the five smallest dairy farms received $361. The largest farms have
a much better opportunity of earning a better income since they have larger
dairy herds, smaller machine costs per crop acre, and a greater labor efficiency
(Table 18). The smaller farms, however, have a higher net return per cow
than the larger farms. This situation is opposite to that occurring on beef
cattle ranches, where the smallest ranches had the lowest net returns per animal
unit.
Comparison of high and low income farms. A comparison of
some of the factors on four dairy farms receivingthe highest labor incomes
and the four receiving the lowest labor incomes is given in Table 19. On the
high income farms, crop yields are approximately 25 per cent better than on
the low income farms, machine costs per crop acre are less, and butterfat production per cow is higher.
Table 19.
COMPARISON OF Hinu AND Low INCOME DAIRY FARMS
Keating Area, Baker County, Oregon, 1939
Four
Four
Item
Labor income
Total productive man work units
Man eguivatent
Productive man work units per man
Animal units productive livestock
Animal units productive livestock per crop acre
Acres in crop
Number of milk cows
Livestock returns per productive animal unit
Pounds of butterfat per cow
Value of feed fed per productive animal unit
Livestock returns above feed costs per productive
animal unit
Crop index
Machine cost per crop acre
All 14
high
income
income
farms
dairy
farms
$84200
$-37.00
$430.00
398.4
farms
392.0
1.34
292.3
25.4
0.24
103.7
16.0
tow-
406.0
1.77
228.8
37.3
0.62
1.51
283.1
31.8
0.4
78.8
15.4
78.6.
14.1
$ 64.50
207.3
$ 27.20
$ 45.20
195.0
$ 16.20
$ 5500
$ 37.30
$ 29.00
$ 25.70
$
$
$
105.6
3.20
79.0
7.10
195.0
$ 19.30
90.0
5.40
Although the high income group uses $11 more feed per productive animal
unit, they receive $8.30 more returns above feed costs. The practice of feeding
more may be the result of the quantity of feed available. The- high income
group, though feeding 40 per cent more feed, produced a surplus of $481 worth
of feed crops, while the low income farms did not produce enough for their
own use. On an average the low income farms purchased about $70 worth of
feed per farm.
The higher income group had more acres in crop, but had fewer animal
units, so when size is measured by productive man work units the two groups
of farms are relatively the same size. The more successful farms had an
average of 1.34 men working, as compared with 1.77, but accomplished approximately the same amount of work. Each man took care of 229 days of work
on the low income farms as compared with 292 days on the high income farms.
The machinery cost per crop acre on the high income farms was $3.20 as
compared with $7.10 on the iow income group, yet the crop yields were higher.
36
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
This difference is greater than can be explained by the size of the farms and
would therefore seem to be due to management.
Table 20. LABOR EFFICIENCY AND INCOME ON 17 GENERAL LIvESTOCE FARMS
Keating Area, Baker County Oregon, 1939
Productive man work
units per man
Group
Under 200
200 to 300
300 and over
All general live-
stock farms
Average
Number
of farms
150.4....
243.8
7
Labor
income
Machine
cost per
crop acre
$-148
$5.20
6.50
359.0..
6
4
315
786
215.9..
17
$ 235
Livestock
retUrnS
above feed
and labor
costs per
productive
animal unit
$-26.20
1160
2.80
9.90
$6.00
$ 6.20
Productive
man work
units
per farm
272.2
259.6
411.3
300.5
GENERAL LIVESTOCK FARMS
The average labor income on general livestock farms was the lowest of
any of the five farming types. It varied from $1,500 to a minus $1,700 with
an average of $235 for all farms.
General livestock farms received about 58 per cent of their income from
the sale of livestock and livestock products. These, however, were of several
different kinds. Returns and costs per animal unit consequently vary considerably, depending to a large extent upon the kind of livestock. Since it was
common practice for a farm to have a mixture of several different kinds of
livestock, it becomes impracticable to draw conclusions concerning the specific
influence that livestock may have had on the farm income. For this reason
the analysis will attempt to point out the factors responsible for variation in
income that are least affected by the livestock program.
Size of farm. In most of the other types of farming, size of farm has
been an important factor in explaining some of the variation in income. On
general livestock farms, however, it does not appear to be so important. The
data indicate that farms of 60 acres or less were just as successful as farms of
over 80 acres, and farms having over 30 animal units of livestock were no more
successful than those having less than 15 animal units. When size of farm
is measured by productive man work units the results indicate no relationship
between size and income.
Productive man work units per man. In order for the operator to
receive a fair wage for his labor and management, it is necessary for him to
have a full-time job and to accomplish the largest possible amount of work
during the time employed. This is clearly indicated in Table 20. The farms
having about 150 days of average work per man received a minus labor income
of $148. The farms accomplishing 350 days per man received $786. The most
efficient farms were considerably larger, had higher livestock returns above
feed and labor costs, but had higher machine, costs. The farms with less than
200 work units per man were smaller than the most efficient fariris but were
larger than the group having 244 work units per man.
Crop yields. The farms having less than. 75 per cent of average yields
received a labor income averaging $144 (Table 21). The higher yields were
accompanied by higher machine costs per crop acre, but the farms having the
37
FARM ORGANIZATION AND FINANCIAL RETURNS
Table 21. Cno INDEX AND INCOME ON 16 GENERAL LIVESTOCI< FARMS
Keating Area, Baker County, Oregon, 1939
Livestock
returns
above
-
feed and
Crop index
Group
Under 75
75 to 125
125 and Over
Average
58.2
104.3
1134.7
Number of
farms
Labor
income
5
8
3
$144
252
998
unit
Machine
cost per
crop acre
Productive
man work
units
per man
$-11.7O
3.40
6.40
$4.70
6.10
6.90
190.5
231.5
262.3
labor costs
per produetive
animal
highest yields received a higher livestock return per animal unit above feed
and labor costs and were more efficient in their labor program.
CROP FARMS
The crop farms have the third largest average labor income of the five
types of farming. The labor income varies from $115 to $1,861 with an average of $679 for the eight farms.
Size of farm. The farms having -less than 150 productive man work units
per farm received labor incomes averaging $165 and capital accumulations per
year averaging minus $64 (Table 22). On the other hand, the largest farms
received $1,463 labor income and accumulated $393 per year. The largest farms
had more cropped acres, more productive livestock, a lower labor cost per crop
acre, lower machine costs per crop acre, and accomplished more work per man.
The smaller farms had larger yields, but this factor was not enough to offset
their high labor and machine costs. Their 'labor income was less in total and
also per acre.
Comparison of high and low income farms. The three most successful farms received labor incomes averaging $1,247 and a capital accumulation
for 8 years of $361 per year (Table 23). The three least successful farms had
labor incomes averaging $207 and accumulated an average of $169 per year for
18 years. The high income farms were larger, had low feed costs and low
machinery costs, but had larger crop yields. They also accomplished 194 days
of work per man while the low income farms accomplished 125 days of work
per man.
ALL FARMS
The preceding analysis shows that size of farm, labor efficiency, crop
yields, and feeding rates affect income to varying degrees, depending on the
type of farming. In order to gain a general impression of the factors affecting
income for the area as a whole (regardless of type of farming) the following
discussion will deal with factors affecting incomes on all 61 farms.
Size of farms. In this study it was found that as the size of farm in-
The larger farms have a better opportunity
to obtain a well-balanced farm organization that can be operated with a relatively high degree of efficiency. Farm labor, the use of machinery, selection of
enterprises, and the layout of fields can be carried out to a better advantage
on the large farms than on the small farms.
Productive man work units are probably the best measure of size of farm
since they account for both animal units and acres in crop, and places each on
creased the income also increased
Table 22. SIZE oi FARM AND INcoME ON 8 CROP FARMS
Keating Area, Baker County, Oregon, 1939
Average
Number
of farms
Under 150
119.0
2
150 to 350
239.6
4
350 and over
472.1
2
All crop farms
267.6
8
acre
Acres
in crop
128.4
$4.60
39.6
$13.00
3.0
$-64
110.4
3.60
82.1
11.00
10.0
208
1,463
97.5
3.90
173.6
8.60
31.0
393
679
109.0
$3.90
94.3
$10.10
13.5
$201
Crop
index
165
546
$
Units
crop
Labor
income
$
Animal
Labor
cost
per
crop
acre
Total productive man work units per farm
Group
Machine
cost
per
procluc-
tive
livestock
Capital
accutnulation
per
year
39
FARM ORGANIZATION AND FINANCIAL RETURNS
Table 23. COMPARISON OF HIGH AND LOW INCOME CROP FARMS
Keating Area, Baker County, Oregon, 1939
Three high
Three low
farms
farms
income
Item
Labor income
$ 1,247
$
Capital accumulation per year
Total farm investment
$
361
$17,171
128.0
23.6
365.0
1.88
194.5
58.70
$
16.10
$
$
42.60
3.90
104.1
$
Per Cent return on investment
Acres
7.3
in crop
Animal Units of productive livestock
Total productive man work units
Total man equivalent
Productive man work units per man
Livestock return per productive animal unit
Value of feed fed per productive animal unit
Returns per productive animal unit above
feed costs
Machine cost per crop acre
$
$
Crop index (1938)
$
$
income
All eight
crop farms
207
-0.9
169
5,947
63.4
4.5
179.9
1.44
124.6
67.60
32.70
$
$
18.20
34.90
4.60
102.6
$
$
40.00
3.90
109.0
679
4:7
201
$11,264
94.3
$
13.5
267.6
1.69
$
158.7
58.20
a fairly comparable basis. The farms having over 1,100 productive man work
units per farm received a labor income averaging $3,186, while the smallest
farms received the lowest labor income averaging $300 per farm (Table 24).
Table 24.
Sizx OF FARM AND INcoME
Keating Area, Baker County, Oregon, 1939
Total productive
men work units
per farm
Group
Under 200
200 to 500
500 to 800
800 to 1,100
1,100 and over
ALL FARMS
Average
Number
of farms
154.1..
339.8..
617.8..
952.2..
2,121.9..
576.S..
$
30
Labor
income
$
12
per year
300
380
937
$
832
$
1,628
3,186
6
5
61
Capital
accumulation
$
Animal
units of
produclive
livestock
Total
farm in.
vestment
Acres
in crop
41.4
88.5
177.0
366.8
524.3
162.8
446
346
1,238
924
298.2
605.8
5,173
13,108
20,805
59,536
110,243
561
118.0
$ 28,077
66
9.3
40.1
97.0
$
-
Table 25. Siza OF FARM AND EFFICIENCY
Keating Area, Baker County, Oregon, 1939
Total productive man
work units per farm
Average
Group
Under 200
200 to 500
500 to 800
800 to 1,100
of farms
Crop
index
Machine
costs per
crop acre
Productive
man work
units per
man
30
12
115.6
105.4
115.4
91.2
92.4
$5.70
6 17.8
5.20
4.10
2.60
4.80
140.9
216.4
228.5
263.5
280.7
576.5
61
100.0
$4.30
237.9
154.1
339.8
952.2
1,100 and over 2,121.9
ALL FARMS
N urni,er
S
The relationship between size of farm and capital accumulation is very
It shows that over a long period of time the larger farms made
a greater average net gain per year than the smaller farms. Although the
large farms stand the chance of losing more than the smaller units in a relatively poor year, the data show that over long period of time the larger farms
accumulate considerably more than the smaller farms. For the most part, this
higher increase in net worth per year can be attributed to the larger amount
significant.
40
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
of capital to work with and the attainment of an efficiency of operation, which
is not ordinarily possible on the smaller farms.
The smaller farms were considerably more efficient in crop production,
having yields about 23 per cent higher than the larger farms (Table 25). The
larger farms, however, had lower machinery and equipment costs per crop
acre. The discrepancy in machine costs on the largest farms can be attributed
to the type of farming in which these farms are classified. Four of the five
farms are sheep ranches and machine costs are considerably higher than on
other types of farming due to expenses such as sheep shearing and frequent
travel between livestock on the range and the home ranch. These expenses
would not be common to the other farm types.
Labor efficiency. Increases in labor efficiency are accompanied by relatively steady increases in labor income (Table 26). Farms having less than
150 productive man work units per man received labor incomes averaging $221,
while those farms having over 300 days of work per man had labor incomes
pf $1,460. The former group increased their net worth $379 per year on the
average, whereas the most efficient farms accumulated $1,218 ier year.
The group of farms having an average of 259 days of work available per
man had almost twice as many animal units of livestock as the most efficient
farms, but the latter managed their farm business in such a manner that they
received a higher labor income, and over a period of years obtained a larger
increase in net worth per year.
Table 26. LABOR EPFICiENCY AND INCOME
Keating Area, Baker County, Oregon, 1939
Productive man work
units per man
Group
Under 150
150.22 5
225-300
300 and over
Average
135.5
192.5
258.9
374.3
Animal
Number of
farms
10
19
23
9
Labor
income
$
221
424
1,189
1,460
Capital accumulation
per year
$
379
143
739
1,218
units of
productive
livestock
36.4
58.7
206.2
108.5
A comparison of 10 high income and 10 low income farms. The 10
farms receiving the highest income received a labor income of $3,206, or figured
in another way, they earned 6.6 per cent on their average farm investment
(Table 27). The operators of the low income farms received a minus $568
labor income, or a loss of 1.8 per cent on their farm investment. Over a period
of 22 years the high income farms accumulated on the average $1,065 per year.
The low income farms accumulated $408 per year for 18 years. The high income farms were larger, were more efficient in their labor program, received
a higher net livestock return, had higher crop yields, but lower machine costs.
Not all the difference in income can be attributed to size and efficiency.
The type of farming that the individual farm in each group represents has a
very definite influence on the income of these farms. The low income group
consists of two beef cattle ranches, three dairy farms and five general livestock
farms. The high income group is composed of five beef cattle ranches, four
sheep ranches and one crop farm. As previously indicated, range livestock
ranches were for the 1 year the most successful type of farming, and general
livestock and dairy farms were as a whole the least successful.
FARM ORGANIZATION AND FINANCIAL RETURNS
41
Table 27. COMPARISON OF HIGN AND Low INCOME FARMS
Keating Area, Baker County, Oregon, 1939
Ten high
Ten low
farms
farms
Labor income
Per cent return on investment
Capital accumulation per year
Total farm investment
Average acres in crop
Animal units of productive livestock
Total productive man work units
Total man equivalent
Productive man work units per man
Livestock returns per productive animal units
above feed and labor costs
Machine cost per crop acre
Crop index (1938)
Years of farming experience
Years on this farm
Age of operator
Operators education (years)
$ 3,206
$
$ 1,065
$
6.6
$80,765
444.6
414.8
1,400.7
-568
-1.8
408
$21,304
110.0
63.4
426.3
2.10
202.6
5.37
260.8
$
$
9.80 1$
3.50
101.1
34.7
22.1
56.0
10.8
All 61
income
income
Item
$
-5.00
5.50
94.9
28.1.
18.1
51.0
8.8
farms
832
4.1
561
$28,077
162.8
118.1
576.5
2.42
237.9
$
$
$
$
5.60
4.30
100.0
27.1
13.5
50.0
9.7
Personal data concerning the operator show that the operators on the high
income farms had attended school for almost 11 years, had about 35 years of
farming experience, and were approximately 56 years old. The operators of
the low income farms had fewer years of education and farming experience,
and were younger by 5 years.
PRESENT ECONOMIC STATUS
in the preceding analysis all farms have been considered from a basis that
lends itself to comparing one farm with another or one group of farms with
another group. This procedure assumes that all farms are free of debt, that
all land operated on each farm is owned by the operator, and that all taxes have
been paid. Of course this situation is unreal. Most of the farms do have
debts of one kind or another, many farms have rented land, and a few farms
have delinquent taxes.
The 61 operators included in this area, according to their own estimates,
had an average total farm capital or investment of $28,077. Of this amount,
$7,372 were liabilities of the operator in the form of real estate mortgages,
short-term credit, delinquent taxes, and unpaid interest. In addition to the
liabilities, $3,721 of the total average capital is the value of rented property.
The average operator's equity per farm is $16,984 after all deductions for
liabilities and the value of rented property have been made.
THE CREDIT SITUATION
Mortgage indebtedness. Of the 61 farms in the Keating Area, 45 were
mortgaged by 63 individual loans. Of the 63 loans made, 28 were made by the
Federal Land Bank and 6 by the Land Bank Commissioner. Federal Land
Bank and Commissioner loans constituted 78 per cent of the total amount of
outstanding mortgages. The remaining 29 mortgages were held by private individuals and institutions and the State Land Board. These loans accounted for
the remaining 22 per cent of mortgage indebtedness.
The degree of indebtedness naturally varies a great deal between individual
farms, some farms have no mortgage outstanding, while on other farms the
Table 28.
REAL ESTATE MORTGAGE INDEBTEDNESS ON MORTGAGED FARMS BY Tvz 05 FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Beef cattle
Sheep
Dairy
General livestock
Crop
ALL FARMS
Fisca year's
Number Original Present
Age of
of farms amount amount present Per cent
mortoutOutmortgage paid
standing standing (years)
off
gaged
Prin.
cipal
Per cent
princiRate of pal paid
interest off each
year
Interest
paid
$ 9,201
$
13
$10,550
5
29,700
25,777
8
2,835
1,828
payments
5.4
12.8
$293
460
4.9
2.4
9.6
13.2
912
1,183
4.4
4.6
35.5
94
92
4.8
1.4
4.6
1.4
7.7
13
4,410
4,020
6.1
8.8
247
194
8
3,342
2,865
9.9
14.2
98
150
5.1
1.4
45
$ 8,527
$7,391
7.2
13.3
$287
357
4.6
1.8
Represents the average number of years the present mortgage has been outstanding.
$
FARM ORGANIZATION AND FINANCIAL RETURNS
43
mortgage indebtedness amounts to more than the operator's equity. Considering
the area as a whole, the total mortgage indebtedness on real estate owned by
the operators represents 36.8 per cent of the total value of this property.
The average amount of loans outstanding per mortgaged farm varied from
$1,828 on dairy farms to $25,777 on sheep ranches with an average of $7,391
for all farms actually mortgaged. (Table 28.) The original amount of the
mortgage indebtedness on all 61 farms (unmortgaged farms included) was
$6,290, part of which has been paid, the present amount outstanding being
$5,452 per farm.
The weighted average rate of interest on real estate mortgages was 4.6
per cent. The Federal Land Bank and Land Bank Commissioner loans received 3 and 4 per cent respectively, while the private mortgagees, State Land
Board, and banks received from 4 to 8 per cent.
The age of the individual mortgages ranged from less than 1 year to more
than 20 years with an average of 7 years.
The percentage of the original amount of the mortgages that has been
paid off varies from 8.8 per cent on the general livestock farms to 35.5 per cent
on dairy farms with an average of 13.3 per cent for all farms. Thus on the
average 1.8 per cent of the original amounts of the present mortgages has been
paid off each year during the 7 years that the mortgages have been outstanding.
During the year covered by this study, the operators paid off 3.3 per cent of
their original principal. Since most of the mortgages are Farm Credit Administration loans that operate on an amortization basis, the amount of the yearly
installment which is applied on the principal becomes larger each year and
conversely the amount paid as interest becomes less.
The delinquency in principal and/or interest payments amounted to 9.5
per cent of the number of loans outstanding or 3.5 per cent of the total
amount outstanding.
The ability of the operator to repay his debts depends a great deal upon
the size of farm, the volume of business, gross receipts, the efficiency of
operation, and his general attitude toward debt repayment. In order to have a
good debt carrying rapacity an operator should have a business large enough
to permit efficient operation and to provide a gross income that will pay all
farm and living expenses and all interest charges and principal payments on his
indebtedness.
The data indicate that on the average, after all the operator's farm expenses
had been met, he had $1,797, farm-furnished living not included, with which to
pay living expenses and interest and principal payments on his indebtedness.
The size of farm, efficiency of operation, and income for the present year mdirate that the repayment rapacity appears to be satisfactory. Crop yields, range
conditions, and changes in prices received by farmers may considerably modify
the farm income and for this reason one year's income is not entirely sufficient
to measure an area's loan repayment ability.
Short-term credit. Short-term credit is extended in the form of loans
that are to be repaid within a relatively short period of timeusually within a
year. The credit is normally used to pay current farm operating expenses and
for purchasing livestock and farm equipment. Chattel mortgages on crops,
livestock, and equipment represent the usual type of security.
Short-term credit consisted of 48 loans on 46 of the farms. Bank loans
were largest in number, but ranked second in importance with respect to total
year-dollars of credit* (Table 29). Production Credit Association loans acSee page 54, Appendix, for explanation of terms.
44
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
Table .29.
SHORT-TERM CREDIT BY SouRcE OF CREDIT
Keating Area, Baker County, Oregon, 1939
Year-dollars
per loan
Interest
Bank
$4,724
850
832
$251
Otherf
17
19
12
TOTAL LOANS
48
$2,217
Number of
Source of credit
loans
per loan
Rate of
erest
Per cent
Baker Production Credit Association
52
45
5.0
6.1
5.4
' P.C.A. borrowers paid on the average $12 per loan for inspection charges. This
amounts to .26 per cent of the total year-dollars of P.C.A. credit. These borrowers also
must own stock iii the P.C.A. The amount of interest and the rate of interest is, therefore,
no comparable to the other rates quoted.
t Includes private, F.S.A., etc.
counted for 75 per cent of the total year-dollars of credit, bank loans accounted
for 15 per cent, and other loans 10 per cent. Over half the Production Credit
Association loans were on beef cattle and sheep ranches. Ten of the 19 bank
loans were on beef cattle ranches.
Table 30.
YEAR.DOLLARS or SHORT-TERM CRILOIT AND INTEREST PAID PER FARM BY TYPE
OP FARMING
Keating Area, Baker County, Oregon, 1939
Number of
farms
Type of farming
Year-dollars
credit
Interest
per farm
Rate of
interest
Per cent
Beef cattle
$ 1,566
11,015
Sheep
Dairy
General livestock
8
524
274
397
61
$ 1,745
14
17
Crop
ALL FARMS
$ 88
559
27
15
20
5.6
5.1
5.2
5.3
5.2
The total year-dollars per farm varied from $11,035 on sheep ranches to
$274 on general livestock farms. The average for all farms was $1,745
(Table 30). It must be remembered that the rates of interest do not account
for inspection charges and the cost of owning stock in connection with Production Credit Association loans.
LAND TENURE
Thirty-one of the 61 operators studied in this area rent land. Of these 31,
7 rent all the land they operate, and 24 rent land in addition to the land they
own.
Approximately 37 per cent of all the range land operated (not including
publicly owned land), about 26 per cent of the noncropland pasture and about
18 per cent of the cropland are rented. In terms of acres these percentages
represent 36,825 acres of grazing land, 310 acres of noncropland pasture, and
2,106 acres of cropland.
Although over a third of all the acres operated is rented, the value of these
acres amounts to only 13 per cent of the total property valuation of the area.
The high percentage of range land with its relatively low valuation per acre
accounts for this apparent discrepancy. When measured by value, the largest
FARM ORGANIZATION AND FINANCIAL RETURNS
45
percentage of the rented property is operated by beef cattle ranches. These
outfits lease about 47 per cent of all rented land.
Nine of the 31 renters had crop share leases while the remaining 22 paid
cash rent. The operators renting on the share basis usually paid one-half the
hay and one-third the grain produced on the rented property. The landlord
would pay the taxes and water charges and in some cases would furnish some
of the seed.
Most of the grazing land rents for cash, but in a few cases the renter pays
the taxes on the property or makes fence improvements for his rental fee. The
grazing land rented for 5 to 15 cents per acre with an average of about 9 cents.
On the basis of the valuation placed on the rented property by the renters,
the landlords received $5.50 rent per $100 valuation of the rented property. In
turn the landlords paid about $157 taxes per $100 valuation. This would leave
the landlord almost $4.00 (for every $100 worth of property he rents), to pay
other expenses he incurs in operating the land and to pay interest on in-
vestment.
TAXATION
No attempt was made in the field work to ascertain the degree of tax
delinquency. In the Keating Area the taxes payable in 1939 were 14.2 per cent
higher than the taxes payable in 1938. Figures for all of Baker County indicate
that taxes payable in 1939 were 15.3 per cent higher than those of 1938. This
suggests that the increase in tax assessments in the Keating Area is quite comparable to the increase for the county as a whole.
CAPITAL ACCUMULATION
Capital accumulation per year is undoubtedly one of the best measures of
the long time economic progress of an area. It shows the average annual
increase in operator's net worth for the length of time the operator has been
on the present farm.
Capital accumulation varied from $868 per year on sheep ranches to $201
on crop farms with an average for all farms of $561 per year (Table 31).
This average means that the operators increased their net worth $561 per year
for an average of 13 years after paying all farm expenses, all living expenses,
all
interest and principal payments on indebtedness and any personal con-
tributions.
Table 31.
FINANCIAL PROGRESS I1Y TYPE OF FARMING
Keating Area, Baker County, Oregon, 1939
Per cent
c.apital
Net worth
Type of farming
Beef cattle
Sheep
Dairy
General
Crop
livestock
ALL FARMS
Original
accumula.
tion per
year is of
original
net worth
Capital accumulation
Present
Total
$15,514
35,600
3,406
2,910
3,584
$30,756
52,520
7,794
6,221
8,402
$15,242
16,920
4,388
3,311
2,818
$721
$10,129
$18,153
$ 8,024
$561
Per year
868
426
350
101
Years
4.6
2.4
12.5
12.0
5.6
18
20
10
9
12
13
I
5.5
46
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
The two types of range livestock ranches had a considerably higher capital
accumulation per farm and also per year, but it must be remembered that they
were also much larger than the dairy, general livestock, and crop farms, and
therefore had a better opportunity to accumulate larger amounts. The sheep
and cattle ranches accumulated 2.4 per cent and 4.6 per cent per year respectively of their original net worths. Other farm types accumulated 5.6 per cent
to 12.5 per cent per year of their original net worth. This indicates that on
the average the dairy, general livestock, and crop farms though not accumulating
as much per farm or per year were just as successful in relation to their
original investment or net worth as were the sheep and cattle ranches.
The average net worth of the operator when he moved onto his present
farm varied from over $35,000 on sheep ranches to less than $3,000 on general
livestock farms, with an average of $10,129 for all farms. The operator's net
worth when he moved onto his present farm (including down payment on
purchase price, equipment, livestock, and other assets) represents about 42 per
cent of the present value of the operator's holdings. The average down payment per farm, $3,657, accounted for about 50 per cent of the purchase price.
CONCLUSIONS
Farming in this area appears to be founded on a sound basis insofar as
income is concerned. As might be expected, there were some individual farm
operators who incurred losses during the year of this study, while many others
received relatively high incomes.
During the year June 1, 1938 to May 31, 1939, the farmers received an
average return of 4 per cent on their investment and $832 for their labor and
management. Also over a long period of time, representing a total of some
800 man-years of farm experience, these operators increased their net worth
on the average by $561 per year.
About 20 per cent of the farms are too small to produce a satisfactory
income under present methods of farming. Since practically all irrigable land
is now in cultivation, increases in the size of these smaller units, in terms of
acres, can only be obtained through subdivision of larger farms or through
consolidation of small farms.
Other alternatives for increasing income are available and are more prac-
tical. Increasing the number and quality of dairy cows would be desirable for
many of the smaller farms, especially those selling surplus hay. Obtaining
higher quality cows would definitely increase the gross income. As the situation exists, the dairy cows in the Keating Area are inferior in butterfat production. During the year of this study they produced on the average only
slightly more than 200 pounds of butterfat per cow, whereas the state average
was 236 pounds. If rigid culling and purchasing, or raising of good quality
replacements were practiced, there is no apparent reason why the production
per cow could not be raised with little if any additional expense to the operator.
Management is just as important in many respects as size of farm. This
is especially true in the case of beef cattle ranches. The more successful cattle
ranches were operated under a plan of rigid economy. They had much lower
expenses but received almost average gross receipts per animal unit. The low
expense per animal unit was effected by economical feed and labor programs
and low land charges.
The cost of labor, including the amount allowed the unpaid family and the
operator, is one of the- largest expenses. It averages over $1,800 per farm for
FARM ORGANIZATION AND FINANCIAL RETURNS
47
the Keating Area. On many farms economies in the use of labor can be
accomplished. A change in farm enterprises that will permit a better distribution of labor throughout the year, the use of labor-saving machinery, better
field arrangement, and a careful supervision of hired help may warrant considerable thought on the part of the operator.
Crop yields and machine costs are important factors affecting farm income.
Some farms receive high crop yields and yet have relatively low machine costs.
In fact this situation occurs on the more successful farms on all types of
farming. Crop yields on the individual farm undoubtedly are influenced by
physical factors such as soils and irrigation water supply. Crop yields are also
affected by the operator's methods of tillage, seeding, irrigating, and harvesting
the crop.
Machine costs per farm including interest and depreciation average almost
$700, and it is entirely possible that this sum can be reduced. On many farms
the machinery investment and costs are too large to give adequate returns and
are a definite financial burden on the operator. If a more efficient and economical use of machinery is obtained, it will not necessarily mean a reduction of
yields, for as previously stated, the more successful farms have relatively high
yields with low machine costs.
One of the most serious problems in the area is the rapidly spreading
infestation of whitetop. Unless the spread of this weed is controlled it is very
likely that the productivity of much of the cropland will be seriously affected.
Its control is for the most part beyond the resources of the individual farmer.
Consequently, it appears that cooperative action of all farmers in the area with
aid from local, state, or Federal governments will be required.
The Sparta Area
FARM ORGANIZATION
Farming in the Sparta Area is different in many respects from that in the
Keating Area only a few miles away. The Sparta farms are dry-farmed, small
units (Table 41, Appendix), have very few range livestock, and received a very
low net income for the year of this study.
TYPES OF FARMING
The 19 farms included in the survey were classified according to the major
source of income. In this way, 7 of the 19 farms were classed as dairy farms,
6 as general livestock farms, 5 as crop farms, and 1 as a beef cattle ranch.
LAND USE
Range land comprises about 80 per cent of the total acreage in the 19
farms, and cropland almost 20 per cent (Table 42, Appendix). Of the total
cropland, about 77 per cent is in crop, 16 per cent in summer fallow, and 7 per
cent in pasture.
CROPPING SYSTEM
Alfalfa hay and grain hay account for almost 50 per cent of the total acres
in crop (Table 32). A seed crop together with one cutting of hay is harvested
from about a fourth of the alfalfa acreage. Most of this seed is of the Ladak
variety and a large portion is certified,
Table 32.
UTILIZATION OP Lsn
IN CROps
Sparta Area, Baker County, Oregon, 1939
Acres
per farm
Crop
Hay
Alfalfa hay
Grain hay
TOTAL HAY
Grain
Wheat
Barley
Miscellaneous grai
TOTAL GRAIN
Miscellaneous
New seedings
Garden
Other
TOTAL MISCRLLANEOUS
of total
27.4
8.1
38.3
11.3
35.5
49.6
14.7
5.0
6.8
20.6
7.0
26.5
37.1
6.0
0.9
8.4
1.3
3.6
2.6
TOTAL
Per cent
9.5
9.5
13.3
71.5
100.0
Grain accounts for about 37 per cent of the crop acres. Most of the grain
acreage is in wheat with the balance in oats, barley, and rye. Miscellaneous
crops consist of new seedings of alfalfa and crested wheat grass, corn, crested
wheat grass seed, and the family garden.
48
49
FARM ORGANIZATION AND FINANCIAL RETURNS
As a whole the crop yields receive d in 1938 compared quite favorably with
those "usually" received (Table 33). According to the farmers, 1938 yields
were about 91 per cent of "usual."
Table 33.
1938 AND "USUAL" Caop YIELDS
Sparta Area, Baker County, Oregon, 1939
Per cent
1938 yield
is of
Yield
Crop
Wheat (winter)-Bushels
Wheat (spring)-Bushels
Oats-Bushels
Barley-Bushels
Corn-Bushels
Alfalfa hay (1 cutting)-Toiss
Rye hay-Tons
Alfalfa seed-Pounds
1938
"Usual"
27.0
18.7
28.5
16.9
15.5
25.6
18.5
31.8
24.7
18.5
1.1
1.0
1.3
30.6
1.2
43.9
"usual"
yield
105.4
101.1
89.7
68.5
84.1
95.1
100.0
69.7
91.0
TOTAL
Most crops and livestock are marketed outside the area. "Outside" purchases of feed crops is practically nil amoimting to only 14 bushels of wheat
for the entire area, whereas 'outside" sales consisted of almost 2,000 bushels of
grain and several thousand pounds of alfalfa and crested wheat grass seed.
The small seed crops are sold in Baker, while most of the grain is sold to
farmers in nearby farming communities.
THE LIVESTOCK PROGRAM
The number of livestock per farm varies from 5 to about 60 animal units,
with an average of about 20 for all farms. Dairy cattle are the most important
class of livestock, accounting for over 34 per cent of the total animal units.
Other livestock consisting of hogs, poultry, sheep, and young horses amounts to
20 per cent. Workstock, although they do not in themselves contribute income
directly, constitute 33 per cent of the total animal units. Beef cattle occur on
only one farm and none of the operators have range sheep. The livestock
receipts are mainly derived from the sale of butterfat, hogs, and poultry
products.
DISTRIBUTION OF INVESTMENT
The average investment is shown in Table 34. Land is the largest item,
but all are relatively small especially when compared with the Keating Area.
Table 34. TOTAL FARSI INVESTMENT
Sparta Area, Baker County, Oregon, 1939
Item
Buildings
Land
Livestock
Machinery and equipment
Miscellaneous
TOTAL
As of June 1, 1938.
Investment
per farm"
Per cent
of total
$ 710
3,231
1,034
644
77
12.5
56.7
18.2
11.3
1.3
5,696
100.0
50
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
FINANCIAL SUMMARY
Receipts and expenses. Most of the area's income is derived from the
sale of livestock and livestock products (Table 35). This source of income
accounted for about 52 per cent of the total farm receipts. Crop sales and
miscellaneous receipts are next in importance. A.A.A. payments amounting
to $88 per farm represent about 8 per cent of the total receipts.
Miscellaneous farm receipts is an important source of cash income to these
farmers. It is composed of off-farm labor that accounts for 33 per cent of the
$114; sale of cordwood and posts, 32 per cent; rent of range land, 12 per cent;
and other items, 23 per cent. If these sources of income were not available
there would be very little if any cash available for family living expenses and
debt repayments.
The total expenses per farm varied from $79 to $3,000 with an average for
all farms of $881. Machinery and equipment purchases and their operating
expenses accounted for almost 35 per cent of the total farm expense. Labor
costs, including the value of all hired labor and board as well as unpaid labor
of members of the family, aiiounted to about 22 per cent of the expenses.
Net income. As a whole the net income for these farms is low. The
average net family farm earnings is only $656 per farm (Table 36). This is
the amount, including the value of farm-furnished living, that is available for
family living, for interest on investment, and for wages of the operator and
unpaid members of his family.* These farms lacked $34 of making 4 per cent
on the investment, with nothing allowed for the labor of the operator. Or if
we allow a fair wage for the operator, he lost 5.7 per cent on his investment.
Table 35. FARM RECEIPTS AND EXPENSES
Sparta Area, Eaker County, Oregon, 1939
Item
Average
per farm
Number of farms
Receipts
Crops
Livestock
Livestock products
19
$
AAA payments
224
407
154
85
114
Miscellaneous
987
TOTAL CASH RECEIPTS
$
TOTAL FARM RECEIPTS
$1,077
Inventory increase
90
Expenses
Labor and board
Crop purchases
Livestock purchases
$
76
71
81
305
Machinery and equipment
Buildings and improvements
Property taxes
General operating expenses
18
49
123
TOTAL CASH EXPENSES
$
723
158
TOTAL FARM EXPENSES
$
881
Unpaid farm labor (does not include the operator)
The figure is derived by subtracting all farm expenses not including mortgage interest
or unpaid family labor, from total farm receipts and adding the value of farrn.furnished
living.
51
FARM ORGANIZATION AND FINANCIAL RETURNS
Table 36. FINANCIAL SUMMARY
Sparta Area, Baker County, Oregon, 1939
Amount
Item
Net farm income (receipts minus expenses)
Farm-furnished living
Unpaid family labor
$
196
302
158
NET FAMILY FARM EARNINGS
Net farm income
Less interest on farm investment at 4 per cent
$
34
OPERATOR'S LABOR INCOME
Net farm income
Less value of operator's time
656
$196
230
$196
521
RETURN ON TOTAL FARM INVESTMENT
PER CENT RETURN 05 FARM INVESTMENT (divide return on invest-
ment by total farm investment)
325
5.7
$5,741
TOTAL FARM INVESTMENT
Average of inventory values at beginning and end of year.
If these farmers did not have their farm privileges or farm-furnished living
to supplement their cash income, it is very doubtful if these farm units could
support a family. The value of farm-furnished living as just mentioned averaged $302 per farm. It consists of garden products, $83; dairy products, $63;
eggs, $29; livestock, $48; wood, $41; and 10 per cent of the value of the family
dwelling, which amounts to $38.
REPRESENTATIVENESS OF DATA
If crop yields and prices received by farmers are indications of the typicalness of the income received in any one year, then there is little doubt that the
year of this study is not representative. Crop yields were somewhat below
normal, averaging about 91 per cent of usual yields. Prices received by
farmers during the year of this study were considerably lower than those
received during the years 1926-1935 (Table 9). Prices for wheat and butterfat
were especially low, and these two commodities are the main sources of income
in the Sparta Area.
PRESENT ECONOMIC STATUS
THE CREDIT SITUATION
The total indebtedness per farm averaged $629 and consisted of real estate
mortgages, short-term credit, delinquent taxes, and delinquent interest.
Mortgage indebtedness consists of 9 individual mortgages on 8 of the
19 farms. The amount outstanding as of May 31, 1939 averaged $1,385 per
mortgaged farm and had been outstanding for an average of 6 years. During
this period, 37 per cent of the original amount of the loan had been paid. The
year of this study, the eight mortgaged operators paid on the average $116 on
the principal and $88 on the interest. The interest rate averaged 5.9 per cent
on these mortgages.
Only 6 of the 19 operators used short-term credit. The loans when converted to a full 12 months basis averaged $41 for the 19 farms. The interest
rate averaged about 7 per cent.
52
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
LAND TENURE
Tenancy in this area occurs in about the same proportion as in the Keating
Area.
Of the 19 operators studied, 2 are tenants leasing all the land they
operate, and 5 rent or lease property in addition to owning land.
Approximately 39 per cent of all range land operated and about 7 per cent
of the cropland is rented. Altogether, 38 per cent of the total acreage operated
is rented.
The 4 operators renting cropland on the share basis paid the landlord the
hay and to the grain. Practically all of the range land was rented or leased
for cash, most of it leasing for about 8 cents per acre.
CONCLUSIONS
With possibly one or two exceptions, all farms in the Sparta Area are toc
small to return the operator a fair wage for his labor and a fair return on the
farm investment. A farm should be at least large enough to offer full-time
work to the operator and his family. In the Sparta Area, each man working
on the farm accomplished only about 122 days of productive work during the
year. These 122 days of work are composed not only of farm work, but include
off-farm labor spent in cutting wood, working on roads, and other nonfarm
jobs. Opportunities for off-farm work are rather limited, If there were a
larger supply available, there is no doubt that these farm families would take
advantage of it.
An average of 72 acres of dry-farmed land with the kind of crops grown
and the yields received in this area, even when combined with about 13 animal
units of productive livestock, returns an income that is obviously insufficient to
provide a reasonable standard of living. Increasing the size of farm by an
intensive agriculture does not seem suitable because of the necessity of dryfarming. Also the tillable land is almost completely utilized, precluding any
possibility for increased acreage.
The area does have some characteristics that partly compensate for the
It is rather isolated and consequently personal living expenses,
with respect to amusement and recreational items, are much lower than in
farming communities less isolated. The families tend also to live as much as
possible on farm produced foods. One of the farmers made this statement,
'If we didn't have our garden and our butter, milk, and eggs, I don't believe
low income.
we could stay here very long."
Possibilities for increases in the area's income are strictly limited. However, if there should be any improvement, it will almost necessarily result from
adjustments in the relationship existing between the amount of available farm
work and the number of farm workers.
Appendix
EXPLANATION OF TERMS
Total farm investment is the average of the beginning and ending inventories and represents the value of all land, buildings, and improvements,
livestock, machinery and equipment, feeds, farm supplies, and cash required to
operate the farm business. This figure includes the total value of all farm
property owned, leased, or rented by the operator, and does not include any
deduction for indebtedness.
Productive man work unit is the average amount of work accomplished
by one man in a day at usual farm tasks and under average conditions. The
average labor requirements for various crops and various kinds of livestock
have been determined by a long series of farm management studies. For
example, a dairy cow in eastern Oregon ordinarily requires 12 days of man labor
per year while about two days of man labor are required to grow and harvest
an acre of irrigated wheat. If for a certain farm we know the number of acres
of different crops and the numbers of different kinds of livestock, we can calculate the number of productive man work units that would be required to
operate the farm. The actual amount of work expended on this particular
farm, however, may be larger or smaller than this calculated amount, depending
upon the efficiency with which the work was done.
Man equivalent is the sum of the total labor that was required to accomplish the work on the farm (or farms) reduced to the equivalent of yearly fulltime workers. In this study, the entire time of the operator is charged against
the farm.
Productive man work units per man are the number of average days
work to be done on the farm by each man in a year. It is determined by dividing the total "productive man work units" by the "man equivalent." The num-
ber of productive man work units per man, therefore, indicates at least in a
general way the accomplishments of the available labor.
Animal unit is 1 cow, 5 mature sheep, 100 hens, or their equivalent in
other livestock including workstock. An animal unit of psoductive livestock
does not include workstock. A cattle unit is an animal unit of productive livestock on a beef cattle ranch. A sheep unit is of an animal unit of productive
livestock on a sheep ranch.
Livestock returns is the value of the net increase in livestock during the
It is obtained by subtracting the sum of the value of livestock at the
beginning of the year plus the cost of livestock purchased from the sum of the
value of livestock at the end of the year plus the receipts from livestock and
year.
livestock products sold.
Crop index is a measure of the physical productivity of the farm. The
crop index on one farm or group of farms is expressed as a percentage of the
average yields of the area. If the crop index is 120 for one farm, this would
indicate that its yields are 20 per cent above the average yields for the area.
Machine cost is the total of all cash and noncash expenses incurred in the
use of farm machinery and equipment. It consists of machinery and equipment
operating expenses, depreciation, machine work hired, and interest on the current
value of machinery at 4 per cent.
53
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
54
Land charge is the sum of taxes on land, grazing fees, and 4 per cent
interest on the value of all privately owned land operated.
Labor cost is the total value of all farm labor. It includes the value of
hired labor and the cash cost of their board, and the wage estimated by the
operator for his own time and the time of any unpaid members of his family.
Capital accumulation per year is the amount of net worth (value of
property) that the operator has been able to accumulate per year on the average
during the entire time he has been on his farm. It is computed by subtracting
the operator's net worth at the time he moved onto (or purchased) the farm
from his present net worth and dividing the remainder by the number of years
he has been on the farm.
Year-dollars of short-term credit is the amount of credit used for the
equivalent of a full year. A loan of $1,000 for 6 months would be equivalent
to $500 year-dollars.
Table 37. UTILIZATION OF PRIVATELY OWNED LAND
Keating Area, Baker County, Oregon, 1939
Per cent
Land use
Total acres
of total
acres
9,931.8
489.8
1,465.0
9.0
.4
1.3
11,886.6
10.8
1,178.7
340.0
97,683.8
87.9
111,089.1
100.0
In crop
Idle or fallow
Cropland pasture
TOTAL CROPLAND
Permanent nonplowable pasture
Farmstead, roads and waste
Private range land
TOTAL ACRES
Table 38.
1.
RELATIVE IMPORTANCE OF DIFFERENT Csors BY TYPES.OF FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Crop
Hay:
Alfalfa hay
Wild hay
Other hay
TOTAL HAY
Grain:
Barley
Oats
Wheat
Other grains
TOTAL GRAIN
Miscellaneous:
New seedings
Seed
Garden
Other
TOTAL MISCEL.
LANEOUS
TOTAL
All 61
Beef
cattle
Sheep
Dairy
General
livestock
Crop
Per cent
Per cent
Per cent
Per cent
Per Cent
Per cent
64.0
55.6
10.0
40.9
2.4
5.1
56.0
8.7
6.2
50.7
15.0
1.6
42.9
30.6
farms
8.1
6.1
15.9
79.6
79.9
67.2
48.4
70.9
73.8
5.7
4.6
3.4
1.3
3.6
5.7
.8
6.3
9.2
7.0
4.3
21.4
10.9
11.9
3.4
4.0
6.0
9.1
5.0
7.0
6.3
4.5
15.0
10.1
26.8
47.6
24.1
19.7
4.0
1.0
9.8
3.0
1.9
2.4
5.3
.8
.4
.4
.2
3.7
1.21.0
.1
.2
.6
.2
.7
1.9
5.4
10.0
6.0
4.0
5.0
6.5
100.0
100.0
100.0
100.0
100.0
100.0
Table 39.
FINANCIAL SUMMARY BY Typaa OF FARMING
Keating Area, Baker County, Oregon, 1939
Type of farming
Beef cattle
Item
Average
Number of farms
Farm receipts:
Crops sold
Livestock sold
Livestock products sold
AAA payments
Miscellaneous
TOTAL CASH RECEIPTS
Inventory increase
TOTAL FARM REcEIPTs
Farm expenses:
Labor and board
Crop purchases
Livestock purchases
Machinery and equipment .
Buildings and improvements
General
TOTAL CASH EXPENSES
Unpaid family labor
TOTAL FARM EXPENSES
NET FARM INCOME
Dairy cattle
Sheep
16
14
6
2.5
0.7
13.3
27.6
23.3
98.7
$1,883
1.3
834
$20,673
100.0
$ 3,870
26.9
21.0
39.8
18.5
69.3
30.7
$1,762
233
88.4
11.6
$2,717
100.0
$1,995
100.0
26.0
132
158
432
482
23.4
26.2
48
94
247
321
20.3
57
419
22.6
50
393
18.4
23.8
$13,923
470
96.7
3.3
$1,680
91.1
8.9
$14,393
100.0
$1,844
100.0
168
13,114
6,467
517
130
63.4
31.3
95.9
4.1
$20,396
356
$8,737
100.0
$1,043
256
1,621
1,007
196
1,026
18.4
$5,149
511
91.0
9.0
$5,660
100.0
6,789
375
293
271
$8,381
$3,077
4.5
28.6
17.7
3.5
18.3
277
1,369
3,740
1,357
662
2,925
$ 6,280
0.8
9.5
9.4
4.6
$
$
164
$ 873
$
3.1
2.0
7.2
8.6
61
8
419
794
369
67
113
$
653
All farms
Crop
17
362
749
633
83
56
7.5
77.8
4.3
3.4
2.9
$
General livestock
Per cent
Per cent
Per cent
Per cent
Per cent
Per cent
of total Average of total Average of total Average of total Average of total Average of total
3.4
5.7
3.6
7.0
$1,279
364
251
50.0
14.2
9.8
2.6
4.5
$
556
3,512
1,015
174
144
60.1
17.4
$2,075
485
81.1
18.9
$5,401
440
92.5
7.5
$2,560
100.0
$5,841
100.0
186
50
287
341
722
271
999
643
144
814
18.6
66
115
9.5
3.0
2.5
29.4
390
13.0
3.5
20.1
23.8
0.6
27.3
$1,153
190
85.9
14.1
$1,262
168
88.3
11.7
$3,593
293
92.5
7.5
$1,343
100.0
$1,430
100.0
$3,886
100.0
$
3.1
$
652
3.7
$
8
$1,130
$
$1,955
7.0
25.7
16.5
3.7
21.0
AGRICULTURAL EXPERIMENT STATION BULLETIN 406
56
Table 40. DISTRIBU1ON or INVESTMENT ON 16 BEEF CATTLE AND 6 SHEEp RANCHES
Keating Area, Baker County Oregon, 1939
16 beef cattle ranches
6 sheep ranches
loves talent per
Investment per
Work stock
Productive livestock
Operating cash
Miscellaneous
TOTAL INVESTMENT
Total receipts (including inventory
charges)
Receipts per $100 of
(5 sheep)
$19.90
800
404
2.90
1.60
.50
8.10
.30
.20
$ 99.70
54.20
$49,220
7,175
4,024
1,131
19,914
$227.50
$82,668
$33.50
$167.30
$27,757
4,217
2,124
698
11,027
211
266
$136.40
20.70
10.50
$46,300
3.40
1.00
1.30
Receipts
14.50
8.10
2.30
40.30
1.60
.80
Receipts
$20,673
$ 8,737
investment
unit
Sheep
unit
Ranch
Ranch
Land
Buildings
Equipment
Cattle
unitf
Item
Productive
animal
18.90
25
As of June 1, 1938.
f A cattle unit 15 comparable to a productive animal Unit.
Table 41.
RANGES IN SIZE OF FARMS AND AVERAGE SIZE OF FARM BY DIFFERENT MEASURES
OF SIZE
Sparta Area, Baker County, Oregon, 1939
Number of
farms
Measure
Total productive man work units
Man equivalent
Acres in crop
Total investment
Total animal Units
Table 42.
19
19
19
19
19
Range
Low
39.4
1.0
24.3
$1,329.
5.0
High
366.5
4.1
156.0
$10,742.
57.8
Average
175.2
1.4
71.5
$5,741.
20.1
UTILIZATION OF PRIVATELY OWNED LAND
Sparta Area, Baker County, Oregon, 1939
Land use
In crop
Idle or fallow
Total
acres
Acres
per farm
Per cent
of total
acres
1,358.5
289.8
124.0
71.5
15.2
6.5
15.0
3.2
Farmstead
1,772.3
63.5
7,231.2
93.2
3.3
380.7
19.6
0.7
79.7
TOTAL
9,067.0
477.2
100.0
Cropland pasture
TOTAL CROPLANDS
Private range landj
1.4
" Three per cent or 53.5 acres of the total cropland is irrigated.
t Includes no publicly owned grazing land used under a Grazing Service Allotment or a
Forest Service Permit.